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I.

GENERAL PRINCIPLES

Corporation is an artificial being created by operation of law, having the right of


succession and the powers, attributes and properties expressly authorized by law or
incident to its existence.
Public Corporation is one formed and organized for the government of a portion
of the State.
Classes of Corporations
1. Public or municipal a body politic and corporate constituted by
incorporation of inhabitants of city or town for purposes of local
government thereof or as agency of State to assists in civil government of
the country; one formed and organized for the government of a portion of
the State.
2. Private one formed for some private purpose, benefit, aim or end.
3. Quasi-public a private corporation that renders public service or supplies
public wants.
4. Quasi-corporation public corporations created as agencies of State for
narrow and limited purpose.
Elements of Public Corporation
1. legal creation or incorporation;
2. corporate name;
3. inhabitants; and
4. territory
Under the Local Government Code of 1991, inhabitants and
territory, as elements of public corporation, are referred to as population and
land area, respectively.

Dual Nature of Municipal Corporation


1. Public or governmental it acts as an agent of the State for the government
of the territory and the inhabitants within the municipal limits; it exercises
by delegation a part of the sovereignty of the State.
2. Private or proprietary it acts in a similar category as a business
corporation, performing functions not strictly governmental or political; it
stands for the community in the administration of local affairs. It acts as a
separate entity for its own purposes and not as a subdivision of the state.
The operation of a public market is not a governmental function but
merely an activity undertaken by the city in its private proprietary capacity.
(Figueroa vs. People, 498 SCRA
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GENERAL PRINCIPLES /2

Criterion to determine whether corporation is public: The relationship of the


corporation to the State, i.e., if created by the State as its own agency to help the
State in carrying out its governmental functions, then it is public; otherwise, it is
private.
De Facto Municipal Corporation is a corporation that may exist in fact although
not in point of law because of certain defects in some essential features of its
organization.
Elements/Requisites of a De Facto Municipal Corporation
1. a valid law authorizing incorporation;
2. an attempt in good faith to organize under it;
3. a colorable compliance with the law; and
4. an assumption of corporate powers.

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II. THE LOCAL GOVERNMENT CODE OF 1991:
SALIENT FEATURES
Four Major Parts of the Local Government Code of 1991
1. Book I General Provisions
2. Book II - Local Taxation and Fiscal Matters
3. Book III - Local Government Units
4. Book IV - Miscellaneous and Final Provisions
Effectivity: January 1, 1992
Scope of Application of Local Government Code
Applicable to:
1. all provinces
2. cities
3. municipalities
4. barangays
5. and other political subdivisions as may be created by law, and
6. to the extent provided in the Local Government Code (i.e, devolution of
powers):
a. officials
b. offices, or
c. agencies of the National Government
Aims of the LGC of 1991
The Code is meant to transform LGUs into self-reliant communities and
active partners in nation-building by giving them more powers, authority,
responsibilities and resources.
Rules of Interpretation
1. provision on power: liberally interpreted in favor of LGU; in case of doubt,
resolved in favor of devolution of powers;
2. ordinance or revenue measure: construed strictly against LGU enacting it
and liberally in favor of taxpayer;
3. tax exemptions, incentive or relief granted by LGU: construed against
person claiming;
4. general welfare provisions: liberally interpreted to give more powers to
LGUs in accelerating economic development and upgrading quality of life
for people in community;
5. rights and obligations existing on date of effectivity of LGC of 1991 and
arising out of contract or any other source of prestation involving LGU,
shall be governed by the original terms and conditions of said contract or
law in force at time such rights were vested; and
6. resolution of controversies arising under the LGC of 1991 where no legal
provision or jurisprudence applies, resort may be had to customs and
traditions in place where controversies take place.
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THE LOCAL GOVERNMENT CODE OF 1991: SALIENT FEATURES /4

Declaration of State Policy over LGUs


1. Guarantee genuine and meaningful local autonomy to local government
units or political and territorial subdivisions;
Local Autonomy is self governing. It is the granting of more
powers, authority, responsibilities and resources to the lower or local levels
of a government system. The principle of local autonomy under the 1987
Constitution simply means decentralization. It does not make the local
government sovereign within the state or an imperium in imperio. (Basco
vs. PAGCOR, 197 SCRA 52)
Under the Philippine concept of local autonomy, the national
government has not completely relinquished all its powers over local
governments, including autonomous regions. Only administrative powers
over local officers are delegated to political subdivisions. The purpose of
delegation is to make governance more directly responsive and effective at
the local levels. Policy-setting for the entire country still lies in the
President and Congress. Municipal governments are still agents of the
national government. (Pimentel vs. Aguirre, 336 SCRA 201)
The Supreme Court, in Leynes vs. COA, 418 SCRA 180, upheld the
power of the local government units to grant allowances to judges and
leaving to their discretion the amount of allowances they may want to grant,
depending on the availability of local funds if only to ensure the genuine
and meaningful local autonomy of the local government units.
Section 3, paragraph (e) of the Local Budget Circular, by outrightly
prohibiting LGUs from granting allowances to judges whenever such
allowances are (1) also granted by the national government or (2) similar to
the allowances granted by the national government, violates Section 447 (a)
(1) (xi) of the Local Government Code of 1991. Likewise, it is elementary
in statutory construction that an administrative circular cannot supersede,
abrogate, modify or nullify a statute. (Ibid.)
In affirming the constitutionality of the power of LGUs to
reclassify areas through a zoning ordinance, the Court ruled: The least we
can do to ensure genuine and meaningful local autonomy is not to force an
interpretation that negates powers explicitly granted to local governments.
To rule against the power of LGUs to reclassify areas within their
jurisdiction will subvert the principle of local autonomy guaranteed by the
Constitution. As we have noted in earlier decisions, our national officials
should not only comply with the constitutional provisions on local
autonomy but should also appreciate the spirit and liberty upon which these
provisions are based. (SJS vs. Atienza, 545 SCRA 92)
THE LOCAL GOVERNMENT CODE OF 1991: SALIENT FEATURES /5

The State is mandated to ensure local autonomy of local


governments, and local governments are empowered to levy taxes, fees and
charges that accrue exclusively to them, subject to congressional guidelines
and limitations. (City of Davao vs. RTC Br XII, Davao City, 467 SCRA 280)

2. Ensure accountability of LGUs through institution of effective mechanisms


of recall, initiative and referendum; and
3. Require all national agencies and offices to conduct periodic consultation
with appropriate LGUs, NGOs and Peoples Organizations and other
concerned sectors of community before any project or program is
implemented in their respective jurisdiction.

Application of the Policy. Under the Local Government Code, two


requisites must be met before a national project that affects the
environmental and ecological balance of local communities can be
implemented: (1) prior consultation with the affected local communities and
(2) prior approval of the project by the appropriate sanggunian. Absent
either of these mandatory requirements, the project implementation is
illegal. (Province of Rizal vs. Executive Secretary, 477 SCRA 436)
The prior approval of local government units affected by the
proposed conversion of a Timber License Agreement (TLA) into an
Integrated Forest Management Agreement (IFMA) is necessary before any
project or program can be implemented by government authorities that may
cause depletion of no-renewable resources, loss of crop land, rangeland or
forest cover, and extinction of animal or plant series. (Alvarez vs. PICOP
Resources, 508 SCRA 498)

When the Policy Does Not Apply. The requirement of prior


consultation applies only to national projects and/or programs which are to
be implemented in a particular local community. Although sanctioned by
the national government, the operation of lotto is neither a program nor
project of the national government but of charitable institution, the
Philippine Charity Sweepstakes Office. The projects and programs
mentioned in Section 27 should be interpreted to mean projects and
programs whose environmental and ecological effects are among those
mentioned in Sections 26 and 27 of the LGC. (Lina vs. Pano, GR No.
129093, August 30, 2001)
THE LOCAL GOVERNMENT CODE OF 1991: SALIENT FEATURES /6

Decentralization has three (3) forms:


a. Devolution is the transfer of power and authority from the
national government to LGUs as the territorial and political
subdivisions of the State. The nature of power transfer is political
and the approach is territorial or areal. Under the Local Government
Code, the term devolution refers to the act by which the national
government confers powers and authority upon the various local
government units to perform specific functions and responsibilities.
(Plaza II vs. Cassion, 435 SCRA 294)
b. Deconcentration is the transfer of power, authority or
responsibility, or the discretion to plan, decide and manage from
central point or local levels, but within the central or national
government itself. The nature of transfer is administrative and the
approach is sectoral.
c. Debureaucratization is the transfer of some public functions and
responsibilities, which the government may perform, to private
entities or non-governmental organizations; it is peoples
empowerment or participation in local governance.

Decentralization of Administration (Administrative Decentralization) the


central government delegates administrative powers to political subdivisions in
order to broaden the base of government power.

Decentralization of Power (Political Decentralization) involves abdication of


political power in favor of LGUs declared autonomous. (Limbonas vs. Mangelin,
170 SCRA 786)
Among the regulatory powers of National Government Agencies (NGAs)
transferred or devolved to the LGUs include the following:
1) the reclassification of agricultural lands DAR to cities &
municipalities
2) enforcement of environmental laws DENR to all LGUs
3) inspection of food products and quarantine DOH to cities &
municipalities
4) the enforcement of the National Building Code DPWH to cities &
municipalities
5) the processing and approval of subdivision plans - HLURB to cities
and municipalities
6) the operation of tricycles- LTFRB to cities & municipalities
THE LOCAL GOVERNMENT CODE OF 1991: SALIENT FEATURES /7
Under Sections 129 and 133 of the LGC, empowering the
local government units to create sources of revenue and, in
particular, to collect registration fees and charges, the power of the
Land Transportation Office to register tricycles and to issue licenses
for the drivers thereof, has not been devolved to the local
government units. What was devolved is the franchising authority of
the Land Transportation Franchising and Regulatory Board over the
operation of tricycles but not the authority of the LTO to register all
motor vehicles (including tricycles) and to issue to qualified persons
the license to drive such vehicles. (LTO vs. City of Butuan, 332
SCRA 805)

7) the establishment of cockpits and holding of cockfights - Philippine


Gamefowl Commission to cities & municipalities
Among the basic services and facilities devolved to LGUs include:
1. Agricultural extension and on-site research of the
Department of Agriculture;
2. Community-based forestry project of the DENR;
3. Field health and hospital services and other tertiary health
services of the DOH;
4. Public works and infrastructure projects funded out of local
funds of the DPWH;
5. The school building program of the DECS;
6. Social welfare services of the DSWD;
7. Tourism facilities and tourism promotion and development of the
DOT;
8. Telecommunication services for provinces and cities of the DOTC;
9. Housing projects for provinces and cities, and
10. Other services such as investment support.
How Local Autonomy Enhances Governmental
and Corporate Powers of LGUs
Every local government unit shall have:
1. Full autonomy in their exercise of proprietary rights and management of
economic enterprises.
2. Full authority to secure domestic or foreign grants without the approval of
the NGAs concerned, unless these are projects with national security
implications, and
3. Financial undertakings for LGUs for mutual advantage thru loans and
assistance to calamity-stricken LGU
--o0o--
III. INTERGOVERNMENTAL RELATIONS

1. National Government and Local Government Units


While the Constitution guarantees autonomy to local government
units, the exercise of local autonomy remains subject to the power of
control by Congress and the power of supervisions by the President. Thus
Section 4, Article X of the Constitution provides that the President of the
Philippines shall exercise general supervision over local governments.
Section 25 of the Local Government Code also provides that the
President shall exercise general supervision over local government units.
Local Autonomy
i. The President shall exercise supervisory authority directly over
Congress: Power of
control provinces, highly urbanized cities and independent component
President Power of cities.
supervisions
ii. The President shall exercise supervision over component cities and
municipalities, through province, and over barangays through city
and municipality.
Consistent with the principle of local autonomy, the Constitution
confines the Presidents power over LGUs to one of general supervision.
This provision has been interpreted to exclude the power of control.
(Province of Batangas vs. Romulo, 429 SCRA 736)
In administrative law, supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their duties,
and if the latter fails or neglects to fulfill them, the former may take such
action or step as prescribed by law to make them perform their duties. within the
parameters
Supervisory power, when contrasted with control, is the power of mere of the law
oversight over an inferior body it does not include any restraining
authority over such body. The heads of political subdivisions are elected by
the people. Their sovereign powers emanate from the electorate, to whom
they are directly accountable. By constitutional fiat, the heads of political
subdivisions are subject to the Presidents _supervision only, not control, so
long as their acts are exercised within the sphere of their legitimate powers,
and by the same token, the President may not withhold or alter any authority
or power given them by the Constitution and the law. (Pimentel vs. Aguirre,
336 SCRA 201)
The President can only interfere in the affairs and activities of a
local government unit if he or she finds that the latter has acted contrary to
law. This is the scope of the Presidents supervisory powers over local
government units. Hence, the President or any of his alter egos cannot
interfere in local affairs as long as the concerned local government unit acts
within the parameters of the law and the Constitution. Any directive
therefore by the President or any of his alter egos seeking to alter the
wisdom of a law-conforming judgment on local affairs of a local
government unit is a patent nullity because it violates the principle of local
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INTERGOVERNMENTAL RELATIONS /9

autonomy and separation of powers of the executive and legislative


departments in governing municipal corporations. (Ibid.)
In the case of Dadole vs. Commission on Audit, GR No. 125350,
December 3, 2002, the Supreme Court also declared void Local Budget
Circular 55 for infringing on the local autonomy by dictating a uniform
amount that a local government unit can disburse as additional allowances
to judges stationed therein.
The said circular is an inappropriate way of enforcing the criterion
found in Section 458, par (a)(1)(xi) of RA 7160 and not supported by any
law. The DBM overstepped its power of supervision over local government
units by imposing a prohibition that did not correspond with the law it
sought to implement. The prohibitory nature of the circular had no legal
basis. It is also void on account of its lack of publication.

Power of Control and Power of General Supervision


Over LGUs Distinguished
Power of Power of General
Control Supervision
1. As to
nature of legislative Executive
power
2. As to who President
exercises Congress Assisted by the
the power DILG Secretary
*Creation, conversion of *Oversee whether LGUs
LGUs and alteration of are performing their
its boundaries; duties in accordance
*Allocate powers, respon- with law;
sibilities and resources
among LGUs; *Investigate and impose
*Provide for qualifica- disciplinary measures
tions, election, appoint- (suspension or removal)
3. As to what ment, removal, term, upon erring elective
the power salaries and functions & local government
includes duties of local officials; officials
*Provide for other matters
*concurrent power to
relating to the organi-
impose preventive sus-
zation and operation of
pension upon elective
LGUs
local government
*Amendment of charters of officials
LGUs
INTERGOVERNMENTAL RELATIONS /10

Other distinctions
The distinction between the two powers was enunciated in Drilon vs. Lim:
An officer in control lays down the rules in the doing of an act. If they are not
followed, he may, in his discretion, order the act undone or re-done by his
subordinates or he may even decide to do it himself. Supervision does not cover
such authority. The supervisor or superintendent merely sees to it that the rules are
followed, but he himself does not lay down such rules, nor does he have discretion
to modify or replace them. If the rules are not observed, he may order the work
done or re-done but only to conform to the prescribed rules. He may not prescribe
his own manner for doing the act. He has no judgment on this matter except to see
to it that the rules are followed.
By constitutional fiat, the heads of political subdivisions are subject to the
Presidents supervision only, not control, so long as their acts are exercised within
the sphere of their legitimate powers, and by the same token, the President may not
withhold or alter any authority or power given them by the Constitution and the
law. (Pimentel vs. Aguirre, 336 SCRA 201) Also, the DBM, by issuing Local
Budget Circular 55 which dictated a uniform amount that an LGU can disburse as
additional allowance to judges stationed therein, overstepped its power of
supervision over LGUs by imposing a prohibition that did not correspond with law
it sought to implement. (Dadole vs. COA, GR No. 125350, December 3, 2002)
Power of Supervision Over Liga. The Presidents power of general
supervision, as exercised by the DILG Secretary as his alter ego, also extends to the
Liga ng mga Barangay. It is not subject to control by the Chief Executive or his
alter ego. Hence, when respondent judge appointed the DILG as interim caretaker
to manage and administer the affairs of the Liga, she effectively removed the
management from the National Liga Board and vested control of the Liga on the
DILG. The acts of the DILG went beyond the sphere of general supervision and
constituted a direct interference with the political affairs not only of the Liga, but
more importantly of the barangay as an institution. What the DILG wielded was the
power of control which even the President does not have. (National Liga ng mga
Barangay vs. Paredes, 439 SCRA 130)

6 General Responsibilities of the National Government towards LGUs


a. Formulate policies and set standard and guidelines;
b. Provide funding support;
c. Augment basic services assigned to LGUs;
d. Provide technical and other forms of assistance and coordinate on the
NGA?
discharge of NGA functions;
e. Ensure the participation of LGUs in planning and implementing national
projects, and
f. Conduct mandatory consultations with LGUs.
INTERGOVERNMENTAL RELATIONS /11

Extent of the LCEs Authority over NGAs and their Functionaries


a. The LCE can call upon any employee stationed or assigned in his locality to
advise him on matters affecting the LGU as well as coordinate with said
officials, plans, programs and projects.
b. The LCE can enlist the attendance of the national official stationed in the
LGU on a meeting of elective and appointed officials of the LGU treating
matters in the promotion of the general welfare of the residents.
c. The LCE can also initiate proper administrative or judicial action against
national government official or employee who may have committed an
offense while stationed or assigned in the LGU.
2. Inter-Local Government Relations
a. The province, through the governor, shall ensure that every
component city and municipality acts within its powers. (Sec. 29,
LGC)
b. The city or municipality, through the mayor, shall ensure
that barangays act within the scope of their powers. (Sec. 32, LGC)
c. The governor shall review all executive orders promulgated
by the mayor. The mayor shall review all executive orders
promulgated by the punong barangay. (Sec. 30, LGC)
As part of its delegated power of general supervision, the
Sangguniang Panlalawigan of a province exercises the quasi-judicial
function (administrative disciplinary authority) of hearing and
deciding administrative cases involving elective municipal and
component city officials under their jurisdiction.
In turn, the Sangguniang Panlungsod and Sangguniang
Bayan exercise disciplinary authority over elective barangay
officials within their jurisdiction. The Governor, upon the
recommendation of the Sangguniang Panlalawigan, and the
City/Municipal Mayor, upon the recommendation of the
Sangguniang Panlungsod/Bayan, may impose preventive suspension
upon local elective officials falling under their delegated
administrative jurisdiction.
d. Review of component city and municipal ordinances by the
Sangguniang Panlalawigan (Sec. 56, LGC)
e. Review of barangay ordinances by the Sangguniang
Panlungsod or Sangguniang Bayan. ((Sec.57, LGC)
f. Under RA 6734, executive power in the ARMM is vested in the
Regional Governor, who has control of all the regional executive
commissions, board, bureaus and offices, and exercises general
supervision over the local government units within the Autonomous
Region. (Arimao vs. Taher, 498 SCRA 74)
INTERGOVERNMENTAL RELATIONS /12

3. Relations with POs and NGOs


Section 23, Article II provides that it is the policy of the State to
encourage non-governmental, community-based, or sectoral organizations
that promote the welfare of the nation.

a. Debureaucratization: Private Sector Participation In Local


Governance
Purpose: to ensure the viability of local autonomy as an alternative
strategy for sustainable development. LGUs shall encourage private-
sector participation in the delivery of basic services.
b. Role of POs, NGOs in the LGUs:
LGUs shall promote the establishment and operation of peoples and
non-governmental organizations as active partners.
c. LGUs may enter into joint venture and cooperative undertakings
with peoples and non-governmental organizations particularly in
the following:
1. delivery of certain basic services;
2. capability building and livelihood projects, and
3. developing local enterprises designed to improve
productivity and income, diversifies agriculture, spur rural
industrialization; and enhance the economic and social well-
being of the people.

Special Local Bodies where the Private Sector


may Participate in Local Governance
1. Local Development Council
a duly constituted body which shall assist the corresponding Sanggunian
in setting the direction of economic and social development, and
coordinating development efforts in its territorial jurisdiction.
Relationship of the LDC with the Sanggunian and RDC:
-All programs and policies proposed by the Local Development Council
shall be submitted to its Sanggunian for appropriate action.
-The local development plans approved by the Sanggunian may be
integrated with those of the next higher level of the Local Development
Council.
-All approved local development plans shall be submitted to the Regional
Development Council which shall be integrated into the regional
development plan to be submitted to the National Economic Development
Authority.
INTERGOVERNMENTAL RELATIONS /13

-The Department of Budget and Management shall provide the Local


Development Councils the information on applicable financial resources
and budget allocations to guide their planning.

2. Prequalifications, Bids and Awards Committee (PBAC)


-Primarily responsible for the conduct of prequalification of contractors,
bidding, evaluation of bids, and the recommendation of awards concerning
local infrastructure projects.

3. Local Peace and Order Council, pursuant to EO No. 309, as amended,


Series of 1988.

4. Local School Board


Functions:
1) determine the annual supplementary budget needs for operating and
maintaining public schools;
2) serve as advisory committee on educational matters to the Sanggunian;
3) recommend changes in the names of public schools within the territorial
jurisdiction of the LGU for enactment of the Sanggunian concerned and
4) authorize local treasurers to distribute funds pursuant to the budget
prepared in accordance with existing rules and regulations.

The DECS shall consult the Board on the appointment of division


superintendents, district supervisors, school principals, and other school
officials. However, the requirement in Section 99 of the LGC of prior
consultation with the local school board does not apply to a mere
designation of a schools division superintendent which partakes the nature
of reassignment. It only refers to appointments made by the DECS. (Osea
vs. Malaya, 375 SCRA 285)
The following shall be given priority in the annual school board
budget:
1) construction, repair and maintenance of school buildings and
other facilities of public elementary and secondary schools;
2) establishment and maintenance of extension classes where
necessary; and
3) sports activities at the division, district, municipal and
barangay levels.
INTERGOVERNMENTAL RELATIONS /14

The Special Education Fund may be expended only for salaries and
personnel related benefits of teachers appointed by the local school board in
connection with the establishment and maintenance of extension class.
Extension classes are referred to mean additional classes needed to
accommodate all children of school age deserving to enter in public schools
to acquire basic education.
Likewise, the local Government Code reveals that expenses for
college scholarship grants are not among the projects for which the
proceeds of the SEF may be appropriated. While Secs. 100 c and 272 of the
LGC reproduced Sec. 1 of RA No. 5447, the granting of scholarship to poor
but deserving students was omitted in Secs. 100 c and 272 of the LGC.
(COA vs. Province of Cebu, GR No. 141386, November 29, 2001)

5. Local Health Board


Functions:
1) propose to the Sanggunian the annual budgetary allocation for
health services according to the DOH criteria;
2) serve as advisory committee on the health to the Sanggunian; and
3) create its own advisory committees to advise local health agencies
on personnel selection and discipline, budget review, operations
review, bids and awards, grievances and complaints and similar
functions according to technical and administrative standards of the
DOH.

6. Peoples Law Enforcement Board (PLEB)


a disciplinary body for erring police officers. (RA 6975)

--o0o
IV. CREATION, CONVERSION, DIVISION, MERGER AND
CONSOLIDATION, AND ABOLITION OF LGUs
Creation of LGUs
A local government unit may be created, divided, merged, abolished, or its
boundaries substantially altered by law enacted by Congress in the case of a
province, city, municipality, or other political subdivisions, or by Sanggunian
Panlalawigan (provincial) or Sangguniang Panlungsod (city) ordinance in the case
of a barangay. (Sec. 6) The nature of the power to create LGUs is basically
legislative, hence it is conferred by the Constitution upon Congress and delegated
to the Sangguniang Panlalawigan and Sangguniang Panlungsod with respect to the
creation of barangays. The President has no power to create local government units.
(Municipality of Kapalong vs. Moya, 166 SCRA 70).
While the power to create barangays has been delegated to Sanggunian
Panlalawigan and Sangguniang Panlungsod, Congress, in order to enhance the
delivery of basic services in indigenous cultural communities, may create
barangays in such communities notwithstanding the requirements set forth by law.
[Sec. 385(a), LGC]
In Sema vs. COMELEC, GR No. 177597, July 16, 2008, the Supreme Court
voided the creation of the Province of Sharif Kabunsuan under MMA 201 enacted
by the ARMM Regional Legislative Assembly. Under RA 9054, or the Expanded
Organic Act for Muslim Mindanao, the Regional Legislative Assembly (RLA) has
been delegated the power to create barangays, municipalities and provinces. While
there is no constitutional prohibition for the ARMM RAL to create municipalities
and barangays within its territorial jurisdiction, this is not so in the case of the
creation of provinces and cities. The Court ruled that Section 19 of Article VI
of RA 9054, insofar as it grants to the ARMM Regional Legislative Assembly the
power to create provinces and cities, is void for being contrary to Section 5 of
Article VI of the Constitution and Section 20 of Article X of the Constitution, as
well as Section 3 of the Ordinance appended to the Constitution. The ARMM
Regional Legislative Assembly cannot create a province without a legislative
district because the Constitution mandates that every province shall have a
legislative district. Moreover, ARMM Regional Legislative Assembly cannot enact
a law creating a national office like the office of a district representative of
Congress because legislative power of the ARMM Regional Legislative Assembly
operates only within its territorial jurisdiction as provided in Section 20 of Article
X of the Constitution (Ibid.)
The creation or conversion of a local government unit to another level shall
be based on the following verifiable indicators of viability and projected capacity to
provide services:
a. Sufficient income and
b. Population and/or
c. Land Area
15
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /16

Compliance with the above-cited indicators shall be attested by the


Department of Finance, the National Statistics Office and the Lands Management
Bureau of the Department of Environment and Natural Resources, respectively.

Necessity of Fixing Corporate Limits


As a matter of general rule, municipal corporations cannot, without legal
authorization, exercise its powers beyond its own corporate limits. It is necessary
that it must have its boundaries fixed, definite and certain, in order that they may be
identified and that all may know the exact scope or section of territory or
geographical division embraced within the corporate limits and over which the
municipal corporation has jurisdiction.. A description of the boundaries of a
municipal corporation is said to be an essential part of its charter and necessary to
corporate existence. An incorporation is void where the boundaries of the municipal
corporation are not described with certainty (2 Mc Quillin, Mun. Corp. 3rd Ed.
256).
Any uncertainty in the boundaries of local government units will sow costly
conflicts in the exercise of governmental powers which ultimately will prejudice
the peoples welfare. (Pasig City vs. COMELEC, 314 SCRA 179)
The requirement that the territory of newly created local government units
be identified by metes and bounds is intended to provide the means by which the
area of the local government unit may be reasonably ascertained, i.e., as a tool in
the establishment of the local government unit. (Mariano vs. COMELEC, 242
SCRA 211)

Creation of Barangays
Role of Barangays. As basic political unit, the barangay serves as the
primary planning and implementing unit of government policies, plans, programs,
projects and activities in the community, and as a forum wherein the collective
views of the people may be expressed, crystallized and considered, and where
disputes my be amicably settled. (Sec. 384, LGC)

Who Creates Barangays. A barangay may be created, divided, merged,


abolished or its boundary substantially altered by law or by an ordinance of the
Sangguniang Panlalawigan or Sangguniang Panlungsod. Where a barangay is
created by an ordinance of the Sangguniang Panlalawigan, the recommendation of
the Sangguniang Bayan concerned shall be necessary. Congress, in order to
enhance the delivery of basic services in indigenous cultural communities, may
create barangays in such communities notwithstanding the requirements set forth by
law. [Sec. 385(a), LGC] Under RA 9054, the Regional Legislative Assembly of the
Autonomous Region of Muslim Mindanao is now empowered to create barangays
within its territorial jurisdiction.
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /17

Substantive Requisites. 1) Population - at least 2,000 inhabitants except


in cities and municipalities within Metro Manila and other metropolitan political
subdivisions or in highly urbanized cities where such territory shall have a certified
population of at least 5,000 inhabitants; 2) Income no minimum income
requirement; and 3) Land Area no minimum requirement, but it must be
contiguous but it need not be contiguous if the barangay is comprised of two or
more islands. In Herrera vs. COMELEC, 318 SCRA 336, the Supreme Court said
that contiguous and/or adjacent means adjoining, nearby, abutting, having a
common border, connected, and/or touching along boundaries often for
considerable distances.
The creation of the new barangay shall not however reduce the population
of the original barangay to less than the minimum requirement prescribed in the
Code. (Sec. 386, LGC)
A case involving a boundary dispute between local government units
presents a prejudicial question which must first be decided before plebiscites for the
creation of the proposed barangays may be held. (Pasig City vs. COMELEC, 314
SCRA 179)

Creation of Municipalities
Role of Municipalities. The municipality consisting of a group of
barangays, serves primarily as a general purpose government for the coordination
and delivery of basic, regular and direct services and effective governance of the
inhabitants within its territorial jurisdiction. Sec. 440, LGC)
Who Creates Municipality. A municipality may be created, divided,
merged, abolished or its boundary substantially altered only by an act of Congress,
subject to the criteria established in the Code. (Sec 441, LGC) Likewise, under RA
9054, the Regional Legislative Assembly of the Autonomous Region of Muslim
Mindanao is now conferred with the power to create municipalities within its
territorial jurisdiction.
The President has no power to create local government units. (Municipality
of Kapalong vs. Moya, 166 SCRA 70). However, in Municipality of San Narciso vs.
Mendez, 239 SCRA 11, the validity of the creation of the Municipality of San
Andres by the President through an executive order pursuant to Sections 68 and
2630 of the Revised Administrative Code was upheld by the Supreme Court. Even
if Executive Order No. 353 creating the Municipality of San Andres is a complete
nullity for being the result of an unconstitutional delegation of legislative power,
the peculiar circumstances obtaining in the case hardly could offer a choice other
than to consider the Municipality to have at least attained the status of a de facto
municipal corporation.
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /18

FIRST, on technical grounds:


(a) Suit not brought by the proper party. When the inquiry is
focused on the legal existence of a body politic, the action is
reserved to the State in a proceeding for quo warranto. It must be
brought in the name of the Republic of the Philippines and
commenced by the Solicitor General. While the quo warranto
filed by the Municipality of San Narciso has so named only the
officials of the Municipality of San Andres as respondents, it is
virtually however, a denunciation of the authority of the
Municipality or Municipal district of San Andres to exist and to
act in that capacity; and
(b) Prescription. It was only after almost thirty (30) years that
petitioner San Narciso finally decided to challenge the legality of
EO 353. In the meantime, the Municipal District and later the
Municipality of San Andres began and continued to exercise
the power and authority of a duly created local government unit.
Section 16, Rule 66 of the Rules of Court which sets a five-year
limitation for filing a quo warranto action if its purpose is to
bring about the forfeiture of charter of a corporation, that
period to be counted from the time the act complained of was
done or committed.

SECOND, certain governmental acts pointed to the States recognition of


the municipality:
(a) Executive Order No. 174 classified it as a fifth class municipality;
(b) pursuant to the Judiciary Act, the municipality was included in the
establishment of Municipal Circuit Courts;
(c) under the ordinance appended to the Constitution apportioning the
seats in the House of Representatives, the municipality was
included in the third district of the Province of Quezon.
(d) Section 442 (d) of the Local Government Code provides that
municipal districts created by executive orders shall be considered
as regular municipalities. Congress exercised its power to create
political subdivisions when it incorporated Section 442 (d) in the
Local Government Code. This is a curative law which is
retrospective and aimed at giving validity to acts that were invalid
under existing law.
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /19

Likewise, in Municipality of Jimenez vs. Baz, 265 SCRA 182, the Supreme
Court ruled that where a municipality created as such by executive order is later
impliedly recognized and its acts are accorded validity, its creation can no longer be
questioned. A municipality has been conferred the status of at least a de facto
municipal corporation where its legal existence has been recognized and acquiesced
publicly and officially.
However, in Camid vs. Office of the President, 448 SCRA 711, the Supreme
Court ruled that Section 442 (d) of the Local Government Code does not serve to
affirm or reconstitute the judicially dissolved municipalities such as Andong in
Lanao del Sur which had been previously created by presidential issuances or
executive orders. The provision affirms the legal personalities only of those
municipalities such as San Andres of Quezon which may have been created using
the same infirm legal basis, yet were fortunate enough not to have been judicially
annulled. On the other hand, the municipalities challenged in actual cases before the
Supreme Court and subsequently judicially dissolved in cases such as Pelaez, San
Joaquin and Malabang, remain inexistent unless recreated through specific
legislative enactments, as done with the eighteen (18) municipalities certified by the
DILG. These municipalities derived their legal personality not from presidential
issuances or executive orders which originally created them or from Section 442(d)
but from the respective legislative status which were enacted to revive them. The
legal effect of the nullification of Andong in Pelaez was to revert the constituent
barrios of the voided town back into their original municipalities.
Substantive Requisites. 1) Average annual income of at least two million
five hundred thousand pesos for the last two consecutive years based on the 1991
constant prices; 2) a population of at least twenty-five thousand inhabitants; and
3) a contiguous territory 50 square kilometers. The creation of the new
municipality must not however reduce the income, population and land area of the
original municipality to less than the minimum requirement prescribed in the Code.
(Sec. 442, LGC)
Municipalities existing as of the date of the effectivity of the LGC shall
continue to exist and operate as such. Existing municipal districts organized
pursuant to presidential issuances or executive orders and which have their
respective elective set of elective municipal officials holding office at the time of
the effectivity of the LGC shall henceforth be considered as regular municipalities.
[Sec. 442 (d), LGC]

Creation of Component Cities


Role of Cities. The city, consisting of a group of barangays, serves
primarily as a general purpose government for the coordination and delivery of
basic, regular and direct services and effective governance of the inhabitants within
its territorial jurisdiction. (Sec. 448, LGC)
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /20

Who Creates Cities. A city may be created, divided, merged or abolished,


or its boundary substantially altered only by an act of Congress subject to the
criteria provided in the Code. Sec. 449, LGC) Thus, in Sema vs. COMELEC, GR
No. 177597, July 16, 2008, the power of the Regional Legislative Assembly of the
Autonomous Region of Muslim Mindanao under RA 9054, to create cities within
its territorial jurisdiction has been declared unconstitutional by the Supreme Court.
Substantive Requisites. 1) Income locally generated average annual
income of at least one hundred million pesos for the last two consecutive years (as
amended by RA 9009); and 2) Land Area contiguous territory of at least one
hundred square kilometers; or 3) Population of at least one hundred fifty
thousand inhabitants. The creation of the city shall not however reduce the land
area, population and income of the original unit or units at the time of said creation
to less than the minimum requirements prescribed in the Code. [Sec. 452(a), LGC]
The territorial boundary of a local government unit must be defined with
precision, because any uncertainty in the boundaries of local government units will
sow costly conflicts in the exercise of governmental powers which will prejudice
the people. In enacting RA 7854, Congress did not define the territory of Makati by
metes and bounds and simply provided that the territory shall comprise of the
present territory of the Municipality of Makati. With existing boundary dispute with
Taguig under court litigation, Congress felt that the resolution of the said boundary
dispute be left to the courts to decide. (Mariano vs. COMELEC, 242 SCRA 211)
Inasmuch as RA 9009 amended Section 450 of the Local Government
Code, the ruling of the Supreme Court in Alvarez vs. Guingona, 252 SCRA 695, that
the Internal Revenue Allotments (IRAs) shall be included in the computation of the
average annual income of the municipality for purposes of determining whether the
municipality may be validly converted into a city, is deemed superseded by the
amendatory law.
Section 10, Article X of the Constitution allows the merger of local
government units to create a province, city, municipality or barangay in accordance
with the criteria established by the LGC. Section 450(a) of the LGC which provides
that a municipality or a cluster of barangays may be converted into a component
city is not a criterion but simply one of the modes by which a city may be created.
The creation of an entirely new local government unit through a division or merger
of existing local government units is recognized under the Constitution, provided
that such merger or division shall comply with the requirements prescribed by the
Code. Thus, a city may be created by merging two municipalities even if one of the
said municipalities already qualifies to be upgraded to a component city. (Cawaling
vs. COMELEC, GR Nos. 146319 & 146342, October 26, 2001)

CREATION, CONVERSION, DIVISION, MERGER,


CONSOLIDATION AND ABOLITION OF LGUs /21
In League of Cities of the Philippines vs. COMELEC, GR No. 176951,
November 18, 2008) sixteen municipalities filed, through their respective sponsors,
individual cityhood bills which contained a common provision exempting all of
them from the P100 million minimum income requirement in RA 9009 which
earlier amended the pertinent provision of the Local Government Code . The
cityhood bills lapsed into law (Cityhood Laws) on various dates from March to July
2007 without the Presidents signature. The League of Cities of the Philippines
filed a petition to declare the Cityhood Laws unconstitutional. The Court ruled that
the Cityhood Laws violate Sections 6 and 10 of Article X of the Constitution, and
are thus unconstitutional.
First, applying the P100 million income requirement to the present case is a
prospective, not retroactive application, because RA 9009 took effect in 2001 while
the cityhood bills became law more than five years later.
Second, the Constitution requires that Congress shall prescribe all the
criteria for the creation of a city in the local Government Code and not in any other
law, including the Cityhood Laws.
Third, The Cityhood Laws violate Section 6, Article 10 of the Constitution
because they prevent a fair and just distribution of the national taxes to the local
government units.
Fourth, The criteria prescribed in Section 450 of the Local Government
Code, as amended by RA 9009, for converting a municipality into a city are clear,
plain and unambiguous, needing no resort to any statutory construction.
Fifth, even if the exemption in the Cityhood Laws were written in Section
450 of the local Government Code, the exemption would still be unconstitutional
for violation of the equal protection clause. To be valid, the classification in the
present case, must be based on substantial distinctions, rationally related to the
purpose o the law which is to prevent fiscally non-viable municipalities from
converting into cities. There is no substantial distinction between municipalities
with pending cityhood bills in the 11th Congress and municipalities that did not
have pending bills. The mere pendency of a cityhood bill in the 11th congress is not
a material difference to distinguish one municipality from another for the purpose
of income requirement.

Conversion of a Component City into a Highly Urbanized City


If a component city shall have met the minimum requirements for a highly
urbanized city, it shall be the duty of the President to declare the city as highly
urbanized city upon: (1) proper application and (2) upon ratification in a plebiscite
by the majority of registered voters therein. (Sec. 453, LGC)

CREATION, CONVERSION, DIVISION, MERGER,


CONSOLIDATION AND ABOLITION OF LGUs /22
Substantive Requisites. (1) A minimum population of two hundred
thousand inhabitants and (2) the latest annual income must be at least fifty million
pesos.

Creation of Provinces
Role of Provinces. A province, composed of cluster of municipalities, or
municipalities and component cities, and as a political and corporate unit of
government, serves as a dynamic mechanism for developmental processes and
effective governance of local government units within its territorial jurisdiction.
(Sec. 459, LGC)

Who Creates Provinces. A province may be created, divided, merged or


abolished, or its boundary substantially altered, only by an act of Congress, subject
to the satisfaction of the criteria set forth by the LGC. Thus, in Sema vs.
COMELEC, GR No. 177597, July 16, 2008, under RA 9054, the power of the
Regional Legislative Assembly of the Autonomous Region of Muslim Mindanao
to create provinces within its territorial jurisdiction has also been declared
unconstitutional by the Supreme Court.
Substantive Requirements. (1) Average annual income of at least twenty
million pesos; and (2) contiguous territory of at least two thousand square
kilometers, or (3) a population of not less than two hundred fifty inhabitants. The
creation of the new province shall not however reduce the land area, population and
income of the original unit or units at the time of the said creation to less than the
minimum requirements prescribed by the LGC. (Sec. 461, LGC)
BP 885, which created the Province of Negros del Norte was declared
unconstitutional because it did not comply with the land area criterion prescribed
under the LGC. The use of the word territory in Section 17 of the Local
Government Code refers only to the physical mass of land area, not to the waters
comprising a political entity. It excludes the waters over which the political unit
exercises control. (Tan vs. COMELEC, 142 SCRA 727)

Status of Sub-provinces
Existing sub-provinces are converted into regular provinces upon the
approval by a majority votes cast in a plebiscite to be held in the said sub-province
and the original province directly affected. (Sec. 462, LGC)

Division and Merger of LGUs


The division and merger of local government units shall comply with the
same requirements for their creation. The income, population or land area shall not
be reduced to less than the minimum requirements. Likewise, the income
classification of the original local government unit or units shall not fall below its
current income classification prior to such division. (Sec. 8, LGC)
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /23
Summary of Substantive Requirements in the Creation of LGUs
LGU Created Income Population Land Area
2,000 but
Barangay No minimum 5,000 for Metro No minimum
Requirement Manila & highly Requirement
urbanized cities
Municipality PhP 2.5 M and 25,000, and 50 sq. kms.
Component PhP 100 M and 150,000 or 100 sq. kms.
City (locally generated)
Highly No minimum
Urbanized PhP 50 M and 200,000 Requirement
City
Province PhP 20 M and 250,000 or 2,000 sq. kms.

Autonomous Regions. The Philippine Constitution mandates the creation


of autonomous regions in Muslim Mindanao and in the Cordilleras consisting of
provinces, cities, municipalities, and geographical areas sharing common and
distinctive historical and cultural heritage, and economic and social structures. (Sec.
15, Art. X, PC)
RA 6734, the organic act establishing the Autonomous Regional
Government of Muslim Mindanao was held valid by the Supreme Court. (Datu
Firdausi Abbas vs. COMELEC, 179 SCRA 287) However, the sole Province of
Ifugao which, in the plebiscite, alone voted in favor of RA 6766, cannot validly
constitute the Autonomous Region of the Cordilleras. (Ordillo vs. COMELEC, 192
SCRA 100)
Special Metropolitan Political Subdivisions. The Congress may, by law,
create special metropolitan political subdivisions, but the component cities and
municipalities shall retain their basic autonomy and shall be entitled to their own
local executives and legislative assemblies. The jurisdiction of the metropolitan
authority that will be thereby created shall be limited to basic services requiring
coordination. (Sec. 11, Art. X, PC)
With the passage of RA 7924 in 1995, Metropolitan Manila was declared as
a special development and administrative region and the administration of
metrowide basic services affecting the region was placed under a development
authority referred to as the Metropolitan Manila Development Authority
(MMDA), whose functions were without prejudice to the autonomy of the affected
local government units. The law does not grant police nor legislative powers to
MMDA, even the Metro Manila Council, the governing board of the
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /24
MMDA has not been delegated any legislative power. Clearly, MMDA is not a
political unit. There is no grant of authority to enact ordinances and regulations for
the general welfare of the inhabitants of the metropolis. MMDA cannot open for
public use a private road in a private subdivision. (MMDA vs. Bel-Air Village
Association, Inc. GR No.135962, March 27, 2000). In MMDA vs. Garin, the
Supreme Court reiterated that RA 7924 does not grant MMDA with police power,
let alone legislative power and that all its functions are administrative in nature.
Beginning of Corporate Existence
When a new local government unit is created, its corporate existence shall
commence upon the election and qualification of its chief executive and a majority
of the members of the sanggunian, unless some other date is fixed therefor by law
or ordinance creating it. (Sec. 14, LGC)
Abolition of LGUs
A local government unit may be abolished when its income, population or
land area has been irreversibly reduced to less than the minimum standards
prescribed for its creation under the Local Government Code, as certified by the
national agencies to Congress or to the Sanggunian concerned. Likewise, the law
or, ordinance abolishing a local government unit shall specify the province, city,
municipality, or barangay with which the local government unit sought to be
abolished will be incorporated or merged. (Sec. 9, LGC)
General Effects of Annexation/Consolidation of LGUs
On the legal existence of the territory annexed. Unless otherwise
provided for by law, the annexation of one municipal corporation to another will
dissolve the annexed territory. It shall become part of the annexing corporation and
will fall under the jurisdiction of the latter.
On the laws and ordinances of the annexed corporation. - In the
absence of any provision of law to the contrary, when a territory is annexed to a
municipal corporation, it shall become subject to all the laws and ordinances by
which the annexing corporation is governed.
On the right of officers or employees of the annexed or consolidated
territory to continue to hold their offices. Subject to what the legislature may
provide upon annexation, the officers and employees of the annexed or
consolidated territory shall terminate their official relation with their offices.
On the title to the property of the annexed territory. - When a
municipal corporation is annexed to another, the annexing territory shall acquire
title to the property of the annexed territory at the time of annexation without
compensation unless the annexing statute provides otherwise. Where the annexed
territory, however, forms part of a municipality from which it is taken, the
legislature may provide for the payment of compensation for the indebtedness

CREATION, CONVERSION, DIVISION, MERGER,


CONSOLIDATION AND ABOLITION OF LGUs /25
incurred on account of the property taken. With regard to public buildings and
improvements located in the annexed territory, the annexing territory is not required
to pay for said buildings or improvements as they have already been paid for by the
annexed territory. It would be otherwise if there exists an indebtedness on said
buildings in which case, the annexing state may be required to share in the payment
of said indebtedness.

On the debts and obligations of the annexed territory. - It has been


stated that debts and obligations of a municipal corporation contracted before its
annexation to another territory shall be assumed by the annexing territory in the
absence of any provision to the contrary. The same rule applies of consolidation
where the consolidating municipal corporation is held responsible for the
indebtedness and obligations incurred by the territories which are consolidated.

General Effects of Division of LGUs


On the legal existence of the original corporation. The division of
municipal corporation extinguishes the corporate existence of the original
municipality.
On the property, powers and rights of the original corporation.
Unless the law provides otherwise, when a municipal corporation is divided into
two or more municipalities, each municipality acquires title to all the property,
powers, rights and obligations falling within its territorial limits. Personal properties
of the original corporation shall be equally divided between or among the newly
created units, while real properties shall be acquired by the unit where it is situated.

Plebiscite Requirement
When Conducted. Section 10 of the LGC provides that the creation,
division and merger, abolition or substantial alteration of the boundaries of local
government units must be approved by a majority of votes cast in a plebiscite in the
political unit or units directly affected. Such plebiscite shall be conducted by the
COMELEC within 120 days from the date of the effectivity of the law, not from its
approval The word approval could only mean effectivity as used and
contemplated in Section of the Code. The completion of the publication of the law
(September 1, 2000) should be the reckoning point in determining the 120-day
period within which to conduct the plebiscite, not from the date of its approval
(August 16, 2000) when the law had not yet been published. Since publication is
indispensable for the effectivity of a law (Tanada vs. Tuvera146 SCRA 446)), a
plebiscite can be scheduled only after the law creating a city took effect. (Cawaling
vs. COMELEC, supra)

CREATION, CONVERSION, DIVISION, MERGER,


CONSOLIDATION AND ABOLITION OF LGUs /26
Which Unit Shall Participate. General Rule: voters in the political unit or
units directly affected. Section 10, LGC) In case the creation is by reason of
division of a political unit, the plebiscite for the creation of a new province or
municipality shall include the participation of the residents of the mother province
or mother municipality in order to conform to the constitutional requirement.
(Padilla vs. COMELEC, 214 SCRA 735)
When the law says the plebiscite shall be conducted in the areas affected
this means that residents of the political entity who stand to be economically
dislocated by the segregation of a portion thereof must have the right to participate
in the said plebiscite Logically, those to be included in such plebiscite would be
the people living in the area of the proposed new province and those living in the
parent province. Thus, BP 885, creating the Province of Negros del Norte is
declared unconstitutional because it excluded the voters of the mother province
from participating in the plebiscite. (Tan vs. COMELEC, 142 SCRA 727)
In the conversion of a municipality into a component city, however, only
the registered voters of the municipality sought to be converted into a component
city, shall participate in the plebiscite.

Necessity of Plebiscite
RA 8528 changing the status of Santiago from an independent component
city to a component city is unconstitutional for its failure to provide that said
conversion should be submitted to the people of Isabela in a proper plebiscite, as
required by Section 10, Article X of the 1987 Constitution. A close analysis of the
said constitutional, provisions will reveal that the creation, division, merger,
abolition or substantial alteration of boundaries of local government units involve a
common denominator material change in the political and economic rights of the
local government units directly affected as well as the people therein. (Miranda vs.
Aguirre, GR No. 133064, September 16, 1999)

The Constitution imposes two conditions: (i) the creation, division, merger,
abolition or substantial alteration of boundary of local government unit must meet
the criteria fixed by the Local Government Code on income, population and land
area; and (ii) the law must be approved by the people by majority of the votes cast
in a plebiscite in the political units directly affected. (id)
The requirements of income, population and land area in Sections 7, 8 and 9
of the Local Government Code are imposed to help assure the economic viability of
the local government unit concerned. They were not imposed to determine the
necessity of a plebiscite of the people. (id)
CREATION, CONVERSION, DIVISION, MERGER,
CONSOLIDATION AND ABOLITION OF LGUs /26

The changes that will result from downgrading the city of Santiago from an
independent component city are many and cannot be characterized as insubstantial.
For one, the independence of the city as a political unit will be diminished. The city
mayor will be placed under the administrative supervision of the provincial
governor. The resolutions and ordinances of the city council of Santiago will have
to be reviewed by the Provincial Board of Isabela. Taxes that will be collected by
the city will now have to be shared with the province. (id)
Reiterating the necessity of a plebiscite, the Supreme Court in Latasa vs.
COMELEC, 417 SCRA 601, ruled that substantial differences do exist between a
municipality and a city. For one, there is material change in the political and
economic rights of the local government unit when it converted from a municipality
to a city and undoubtedly, these changes affect the people as well. It is precisely for
this reason why Section 10 of Article X of the Constitution mandates that no
province, city, municipality, or barangay may be created, divided, merged,
abolished, or its boundary substantially altered without approval by majority of
votes cast in a plebiscite in the political units directly affected.

Prejudicial Question
A case involving a boundary dispute between local government units
presents a prejudicial question which must first be decided before plebiscites for the
creation of the proposed barangays may be held. Merely because a plebiscite
has already been held in regard to a propose barangay does not necessarily render
a pending petition for settlement of boundary dispute involving said barangay moot
and academic. (Pasig City vs. COMELEC, 314 SCRA 179)

Attack Against Invalidity of Incorporation


A quo warranto suit against a corporation for forfeiture for of its charter is
reserved to the State must be commenced within the reglementary period of 5 years
from the act complained of was done or committed. (Municipality of Jimenez vs.
Baz, 265 SCRA 182).

--o0o--

V. POWERS OF LOCAL GOVERNMENT UNITS


Classifications
1. Express, implied and inherent
2. Public or governmental, private or proprietary
3. Intramural or extramural; and
4. Mandatory and directory; ministerial and discretionary

I. Governmental Powers of LGUs


A. General Welfare - Sec. 16, LGC Police Power .
The GENERAL WELFARE CLAUSE is the statutory grant of police power
to local government units. It has two branches: (1) the general legislative power
authorizes the municipal council to enact ordinances and make regulations not
repugnant to law, as may be necessary to carry into effect and discharge the powers
and duties conferred upon by the municipal council by law; and (2) the police
power proper authorizes the municipality to enact ordinances as may be
necessary and proper for the health and safety, prosperity, morals, peace, good
order, comfort and convenience of the municipality and its inhabitants, and for the
protection of their property.

Essential Requisites in the Valid


Exercise of Police Power by LGUs
A local government unit is considered to have properly exercised its police
powers only when the following requisites are met (1) the interests of the public
generally, as distinguished from those of a particular class, require the interference
of the State, and (2) the means employed are reasonably necessary for the
attainment of the object sought to be accomplished and not unduly oppressive upon
individuals. In short, there must be concurrence of a lawful subject and lawful
method. (SJS vs. Atienza, 545 SCRA 92) The first requirement refers to the equal
protection clause and the second, to the due process clause of the Constitution.
Thus, a municipality failed to comply with the due process clause when it
passed a resolution recommending the closure or transfer of a gasoline filling
station maintaining that the same was lees than 100 meters away from the nearest
public school and church when the records do not show that it even attempted to
measure the distance, and that such distance was crucial in determining whether
there was an actual violation of the zoning ordinance. (Parayno vs. Jovellanos, 495
SCRA 85)
The following are limitations on the exercise of powers under the general
welfare clause:
1. Express grant by law (e.g., Secs. 16, 391, 447, 458 and 468, LGC)
2. Exercisable only within the territorial limits of the local government unit,
except for protection of water supply.
28

POWERS OF LOCAL GOVERNMENT UNITS /29

3. Equal protection clause. (The interests of the public in general, as


distinguished from those of a particular class, require the exercise of the
power.
4. Due process clause. (The means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive on individuals.)
5. Must not be contrary to the Constitution and the laws.
The following are the requisites for the validity of a municipal ordinance:
1. must not contravene the Constitution and any statute;
2. must not be unfair or oppressive;
3. must not be partial or discriminatory;
4. must nor prohibit, but may regulate trade which is not illegal per se;
5. must not be unreasonable; and
6. must be general in application and consistent with public policy. (Solicitor
General vs. MMA, 204 SCRA 837; Magtajas vs. Pryce Properties, GR No.
111097, July 20, 1994 and Tatel vs. Municipality of Virac, 207 SCRA 157)
7. must not only be within the corporate powers of the city or municipality to
enact but must also be passed according to the procedure prescribed by law.
(Langcao vs. City of Cebu, 440 SCRA 279 and City of Manila vs. Laguio,
455 SCRA 308))

VALIDITY OF ORDINANCES AND ACTS OF LGUs


Appropriation Ordinance for the Poor
An ordinance extending burial assistance of P500 to a bereaved family
whose gross income does not exceed P2,000 a month, has been upheld by the
Supreme Court as a valid exercise of police power. This power is organic and
flexible. The care for the poor is generally recognized as a public duty. The support
for the poor has long been an accepted exercise of police power in the promotion of
common good. The police power of a municipal corporation is broad and xxx
commensurate with, xxx the duty to provide for the real needs of the people in their
health, safety, comfort, and convenience as consistently as may be with private
rights. It extends to all the great public needs and in a broad sense includes all
legislation and almost every function of the municipal government. (Binay vs.
Domingo 201 SCRA 508.)
Prohibiting Legalized Gambling
An ordinance prohibiting the issuance of a business permit to any
establishment allowing its premises to be used for the operation of a casino and
prohibiting the operation of a casino was declared by the Supreme Court
unconstitutional. The ordinance contravenes PD 1869, which authorizes the
PAGCOR to operate casino. PD 1869, which has the force and effect of a law,

POWERS OF LOCAL GOVERNMENT UNITS /30


should not be deemed to have been repealed by the LGC. Implied repeal are not
likely presumed. (Magtajas vs. Pryce Properties Corp. 234 SCRA 255)
Zoning Ordinance
The Supreme Court upheld the validity of a zoning ordinance reclassifying
an area as commercial despite contractual stipulation limiting the use of the parcel
of land to residential purposes which is annotated in the title thereof. The Local
Autonomy Act empowers a municipal council to adopt zoning and subdivision
ordinances or regulation. The exercise of this power need not be done through an
ordinance. A restriction in the contract cannot prevail over the zoning resolution,
because the enactment of the resolution is a valid exercise of police power. The
area where the two lots are located has become industrial and commercial. Traffic,
noise and pollution are not conducive to health, safety or welfare of the resident. It
would now be hazardous to health and comfort to use the lot for residential
purposes, since a highway crosses the subdivision. (Ortigas & CO vs. Feati Bank
94 SCRA 533)
In United BF Homeowners Association, Inc. vs. The City Mayor of
Paranaque City, 515 SCRA 1, it was held that Ordinance NO. 97-08 providing for
the reclassification of certain portions of BF Homes Paranaque form residential to
commercial zone is reasonable and not discriminating or oppressive. It is also
constitutional because it does not impair the contracts between the developer of BF
Homes Paranaque and the lot buyers. The constitutional guaranty of non-
impairment of contracts is limited by the exercise of police power of the State, in
the interest of public health, safety, morals and general welfare. Like in Ortigas,
supra, the Court held that contractual restrictions on the use of property could not
prevail over the reasonable exercise of police power through zoning ordinances.
Likewise, the Supreme Court upheld the validity of Ordinance No. 13 series
of 1952 which prohibited the construction of warehouses that store inflammable
materials within 200 meters from any block of houses. Herein petitioner
constructed a warehouse which stored copra and abaca within 200 meters of a
residential neighborhood. The municipal council passed an ordinance declaring the
warehouse of petitioner a nuisance and directing him to transfer it.
Petitioner contended that the ordinance violated due process. The ordinance is a
valid exercise of police power. Its purpose is to avoid the loss of life and property
in case of fire. (Tatel vs. Municipality of Virac, 207 SCRA 157)
The enactment of a zoning ordinance which reclassified the area where the
oil depot is situated from industrial to commercial and that the continued operation
of the businesses of oil companies in their present location will no longer be
permitted, is a legitimate exercise of police power. Its purpose is to promote sound
urban planning ensuring health, public safety and general welfare of residents of
Manila. The Sanggunian was impelled to take measures to protect the residents of
Manila from catastrophic devastation in case of terrorist attack of the Pandacan oil
terminals. Based on the hierarchy of constitutionally protected
POWERS OF LOCAL GOVERNMENT UNITS /31
rights, the right to life enjoys precedence over the right to property. The reason is
obvious: life is irreplaceable, property is not. When the state or LGUs exercise of
police power clashes with a few individuals right to property, the former should
prevail. Both law and jurisprudence support the constitutionality and validity of the
ordinance. Without a doubt, there is no impediments into its enforcement and
implementation. Any delay is unfair to the inhabitants of the City of Manila and its
leaders who have categorically expressed their desire for the relocation of the
terminals. Their power to chart and control their own destiny and preserve their
lives and safety should not be curtailed by the intervenors warnings of doomsday
scenarios and threats of economic disorder if the ordinance is enforced. (SJS vs.
Atienza, 545 SCRA 92)
Franchising, Registration and Licensing of Tricycle Units
An ordinance requiring tricycle owners to register their unit with, and their
drivers to obtain license from, the City Government was likewise declared
unconstitutional by the Supreme Court. The authority to register tricycles and to
issue licenses for the drivers thereof remains with the Land Transportation Office
and has not been devolved to the local government units. What was devolved is the
franchising authority of the Land Transportation Franchising and Regulatory
Board over the operation of tricycles but not the authority of the LTO to register all
motor vehicles (including tricycles) and to issue to qualified persons the license to
drive such vehicles. (LTO vs. City of Butuan, 332 SCRA 805)
Admission Fee to Movie Houses
It was held that the ordinance penalizing persons charging full payment for
admission of children ages 7 to 12 in movie houses was an invalid exercise of
police powers for being unreasonable and oppressive to theater owners and not
justified by public interest. While a reduction in the price will mean savings for
parents, it is the theater owners who are made to bear the cost of those savings. A
ticket is a property right. The owner has the right to sell it at such price as he can
obtain. (Balacuit vs. CFI of Agusan del Norte, 163 SCRA 182)
Moratorium of Fishing
The Supreme Court also upheld the constitutionality of two ordinances
banning the shipment of all live fishes and lobsters for five years, as well as the
catching, gathering, possessing, buying, selling and shipment of live marine coral
dwelling organisms. One of the devolved powers of LGUs is the enforcement of
fishery laws in municipal waters. This includes the enactment of ordinances to
carry out such fishery laws. While Section 4 of the Fisheries Decree requires all
ordinances and resolutions affecting fishing and fisheries be approved by the
Secretary of Environment and Natural Resources, Executive Order 967 transferred
the Bureau of Fisheries and Aquatic Resources to the Department of Agriculture.
The requirement has been dispensed with. The local government units have the
power to enact ordinances to enhance the right of the people to a balanced ecology
and to protect the environment. (Tano vs. Socrates, 278 SCRA 144)
POWERS OF LOCAL GOVERNMENT UNITS /32

Imposition of Conditions to Business Permit


In the case of Acebedo Optical Co. Inc. vs. The Hon. Court Of Appeals, GR
No. 100152, March 31, 2000, the Supreme Court held that the imposition of special
conditions on the business permit is ultra vires. Police power is essentially
regulatory in nature and the power to issue licenses and permits, if
exercised for a regulatory and revenue-raising purpose, is within the ambit of this
power. While the City Mayor can issue or grant licenses and business permits and
impose conditions or restrictions thereto, such conditions must not amount to a
confiscation of the business. A business permit is issued primarily to regulate the
conduct of business and the city mayor cannot, through the issuance of such permit,
regulate the practice of profession, like that of optometry. Such function is within
the exclusive domain of the administrative agency specifically empowered by law
to supervise the profession, i.e., Professional Regulations Commissions and the
Board of Examiners in Optometry.
Issuance and Revocation of Permits and Licenses
The ordinance imposing licenses and requiring permits for any business
establishments for the purpose of regulation enacted by the municipal council of
Makati falls within the purview of the first branch of the general welfare clause.
Moreover, the ordinance of the municipality imposing annual business tax is part of
the power of taxation vested upon local government units under Section 8 of BP
337. (Rural Bank of Makati vs. Municipality of Makati, 443 SCRA 602)
While the power of the mayor to issue licenses and permits necessarily
includes the corollary power to suspend, revoke or even refuse to issue the same.
However, the power to suspend or revoke these licenses and permits is expressly
premised on the violation of the conditions of those licenses and permits. Similarly,
the power to refuse to issue licenses and permits is premised on non-compliance
with the pre-requisites for the issuance of such licenses and permits. The mayor
must observe due process in exercising these powers, which means that the mayor
must give the applicant or licensee notice and opportunity to be heard. (Lim vs. CA,
387 SCRA 149)
Likewise, even as the mayor has the power to inspect and investigate
private commercial establishments for any violation of the conditions of their
licenses and permits, he has no power to order a police raid on these establishments
in the guise of inspecting or investigating these commercial establishments. Finally,
a mayor has no authority to close down a business establishment without due
process of law there is no provision in the Local Government Code or the Revised
Charter of the City of Manila expressly or impliedly granting the mayor authority to
close down private commercial establishments without notice and hearing, and
even if there is, such provision would be void. The regulatory powers granted to
municipal corporations must always be exercised in accordance with law, with
utmost observance of the right of people to due process and equal protection of the
law. Such power cannot be exercised whimsically, arbitrarily or despotically. (Id.)
POWERS OF LOCAL GOVERNMENT UNITS /33

The Supreme Court has declared unconstitutional an ordinance revoking all


permits and licenses previously issued to operators of night clubs, cabarets, dance
halls and prohibiting the issuance of new permits and licenses for such kind of
business in the municipality. The Local Government Code authorizes the local
government units to exercise police power yet this power does not include the
power to prohibit the establishment of businesses which are not per se illegal.
LGUs can only regulate but cannot prohibit, the ordinance is ultra vires and
unconstitutional. (Dela Cruz vs. Paras, 123 SCRA 569)
In City of Manila vs. Laguio, 455 SCRA 308, the Supreme Court declared
unconstitutional an ordinance which forbids running of nightclubs, sauna parlors,
massage parlors, karaoke bars and similar business establishments, and instructs its
owners/operators to wind up business operations as it amounts to a closure of
the establishment, a permanent deprivation of property and is practically
confiscatory. An ordinance which permanently restricts the use of property that it
cannot be used for any reasonable purpose goes beyond regulation and must be
recognized as a taking of property without just compensation. Private property
which is not noxious nor intended for noxious purposes may not, by zoning, be
destroyed without just compensation.
Nature of the power to issue/revoke permits and licenses. The Local
Government Code is unequivocal that the municipal mayor has the power to issue
licenses and permits and suspend or revoke the same for any violation of the
conditions upon which licenses or permits had been issued. The limits in the
exercise of such power can be contained in the law or ordinance. Section 444 (b)
(3), whereby the power of the Mayor to issue licenses and permits is circumscribed,
is a manifestation of the delegated power of municipal corporation. Necessarily, the
exercise thereof cannot be deemed ministerial. As to the question of whether the
power is validly exercised, the matter is within the province of certiorari, but
certainly, not mandamus. (Robles Arrastre, Inc. vs. Villaflor, 499 SCRA 434)

Foodstuffs
Petitioner questioned the validity of ordinance No. 142, which prohibited
selling perishable foodstuffs outside the public markets; Ordinance No. 145, which
required all perishable foodstuffs to be inspected by the City Health Officer; and
Ordinance No. 150, which prohibited anyone other than the city to operate a public
market. The Supreme Court ruled that Ordinance No. 142 is a regulatory ordinance.
Ordinance No. 145 is intended to promote general welfare. Ordinance No. 150 was
enacted by the city to prohibit the operation of public markets by anyone other than
the city. The claim of petitioner that her market is not public, because it is privately
owned is unmeritorious. The test of public market is its dedication to service of the
general public and not its ownership. (Javellana vs. Kintanar, 119 SCRA 627)

POWERS OF LOCAL GOVERNMENT UNITS /34


Massage Parlors
The City of Manila passed an ordinance prohibiting the operator of a
barbershop from conducting the business of massaging customers in any adjacent
room of the barbershop or in a room in the same building where the barbershop is
located. Petitioner claimed that the ordinance deprived them of their means of
livelihood without due process. The Supreme Court ruled that the ordinance is
valid. It is a police power measure. The objectives behind its enactment are to
impose the license fees for engaging in the operation of massage clinics, a business
entirely different from that of barbershops, and to prevent immorality which might
arise from the construction of separate rooms for the massage of customers.
(Velasco vs. Villegas. 120 SCRA 968)
Grant of Franchises to Operate CATV System
There is no law specifically authorizing the local government units to grant
franchises to operate CATV system. What ever authority the LGUs had before, the
same had been withdrawn by PD 1512 terminating all franchises, permits or
certificates for operation of CATV system previously granted by the local
government units. EO 205 and EO 436, both of which are general laws that
mandate that regulation of CATV operators shall be exercised by the National
Telecommunications Commission including the power to fix the subscribers rates
by CATV operators. Hence, Res. No. 210 approved by Batangas City, granting
petitioner a permit to construct, install and operate a CATV system in Batangas
City, and approving increase of subscribers rates, is defective as it contravenes EO
205 and EO 436. An LGU cannot enact and ordinance or approve a resolution in
violation of a general law. It is a fundamental principle that municipal ordinances
are inferior in stature and subordinate to the laws of the State. An ordinance in
conflict with a state law of general character and statewide application is
universally held to be invalid. Under a general grant of power, municipal
corporations cannot adopt ordinances which infringe the spirit of a state law or
repugnant to the general policy of the State. It must be consistent with the general
law. (Batangas CATV vs. CA, 439 SCRA 326)
Disposition of Public Land
The City of Baguio enacted an ordinance declaring all public lands
occupied by squatters as city government housing project to be sold to them.
Petitioners challenged the validity of the Ordinance. The ordinance is a patent
nullity. No disposition of public land can be made by the City of Baguio without
prior Legislative authority. The law has given the Director of Lands the exclusive
power of disposition of public land. (Baguio Citizens Action, Inc. vs. City Council,
121 SCRA 368)
Closure of Banks
A rural bank not engaged in any illegal or immoral activities does not
warrant its outright closure by the municipal government for its failure to pay
annual business tax. The order of closure violated the banks right to due process.
The violation of a municipal ordinance does not empower a municipal mayor to
POWERS OF LOCAL GOVERNMENT UNITS /35

avail of extrajudicial remedies. The appropriate remedies to enforce payment of


delinquent taxes or fees are provided for in Section 62 of the Local Tax Code.
(Rural Bank of Makati vs. Municipality of Makati, 443 SCRA 602)
Burial Lots
In City Government of Quezon City, vs. Ericta, 122 SCRA 759, the Quezon
City ordinance which required commercial cemetery owners to reserve 6% of burial
lots for paupers in the City was held to be an invalid exercise of police power, but
was instead an exercise of the power of eminent domain which would make the
City liable to pay the owners just compensation Municipal corporations cannot
adopt ordinances which infringe the spirit of a state law or repugnant to the general
policy of the State. It must be consistent with the general law. (Batangas CATV vs.
CA, 439 SCRA 326)

Cockfighting License
It is the Sangguniang Bayan concerned alone which has the power to
authorize and license the establishment, operation and maintenance of cockpits, and
regulate cockfighting and commercial breeding of gamecocks within its territorial
jurisdiction. But its discretion is limited by PD 449, the Cockfighting Law of 1974,
in that it cannot authorize more than one cockpit per city or municipality, unless
such cities or municipalities have population of over 100,000, in which case two
cockpits may be established. Cockfighting is a valid matter of police regulation, as
it is a form of gambling essentially antagonistic to the aims of enhancing national
productivity and self-reliance limitation on the number of cockpits in a given
municipality is a reasonably necessary means for the accomplishment of the
purpose of controlling cockfighting, for clearly more cockpits equals more
cockfight. A municipal ordinance must not contravene the Constitution and any
statute. Ordinance No. 7 contravenes the Cockfighting Law in allowing three
cockpits in a city. (Tan vs. Perena, 452 SCRA 53)

Lease of Stall in Public Market


It was within the ambit of the Sanggunians authority in the exercise of
police power to regulate the enjoyment of the privilege to lease the market stalls.
The enactment of the ordinance was a valid exercise of such governmental
authority to regulate the possession and use of the public market and its facilities.
The lease and occupation of a stall in a public market is not a right but a purely
statutory privilege governed by laws and ordinances. The operation of a market
stall by virtues of a license is always subject to the police power of the city
government. This power could be exercised anytime to change the provisions of the
contracts or even abrogate them entirely, for the protection of general welfare. Such
an act did not violate the non-impairment clause which is anyway subject to and
limited by the paramount police power. (Lucero vs. City Government of Pasig, 508
SCRA 23)

POWERS OF LOCAL GOVERNMENT UNITS /36

Operation of Common Terminal


The subject ordinances prohibit the operation of all bus and jeepney
terminals within Lucena, including those already existing, and allow the operation
of only one common terminal located outside the city proper, franchise for which
was granted to Lucena Grand Central Terminal Inc. The assailed ordinances are
characterized by overbreath they go beyond what is reasonably necessary to solve
the traffic problem. Bus terminals per se do not impede or help impede the flow of
traffic. In the subject ordinances, the scope of proscription against the maintenance
of terminals is so broad that even entities which might be able to provide facilities
better than the franchised terminal are barred from operating at all. The operation of
bus terminals is a legitimate business which, by itself, cannot be said to be injurious
to the rights of property, health or comfort of the community. Unless a thing is a
nuisance per se, however, it may not be abated via and ordinance, without judicial
proceedings. Also, such ordinances were declared unconstitutional as invalid
exercise of police power, an undue taking of private property and a violation of the
constitutional prohibition against monopolies. The compulsory use of the terminal
was held to be oppressive because it would subject its users to fees, rentals and
charges. (Lucena Grand Terminal vs. JAL, 452 SCRA 174

Abatement of Nuisance
While a Sanggunian is empowered under the Local Government Code to
enact ordinances declaring, preventing or abating noise and other forms of
nuisances, it cannot declare a particular thing as a nuisance per se and order its
condemnation. It does not have the power to find as a fact, that a particular thing is
a nuisance with such thing is not a nuisance per se; nor it can authorize the
extrajudicial condemnation and destruction of that as a nuisance which in its nature,
situation or use is not such. These things must be determined and resolved in the
ordinary courts of law. If a thing be in fact a nuisance due to the manner of its
operation, that question cannot be determined by a mere resolution of a
Sanggunian. (AC Enterprises, Inc. vs. Frabelle Corp., 506 SCRA 625)
In Parayno vs. Jovellanos, 495 SCRA 85, it was held that a gas station
business could not be considered a nuisance which a municipality could summarily
abate in the guise of exercising police power. The abatement of nuisance without
judicial proceedings is possible only if it is a nuisance per se. A gas station is not a
nuisance per se or one affecting the immediate safety of persons and property,
hence it cannot be closed down or transferred summarily to another location. A
local government is considered to have properly exercised its police powers only
when the following requisites are met: (1) the interests of the public generally, as
distinguished from those of a particular class, require the interference of the State
and (2) the means employed are reasonably necessary for the attainment of the
object sought to be accomplished and not unduly oppressive. The first requirement
refers to the equal protection clause and the second, to the due process clause.
Respondent municipality failed to comply with due process
POWERS OF LOCAL GOVERNMENT UNITS /37

clause when it passed Res. No. 50. While it maintained that the gasoline filling
station of petitioner was less than 100 meters from the nearest public school and
church, the records do not show that it even attempted to measure the distance,
notwithstanding that such distance was crucial in determining whether there was
actual violation of Section 44. The different local offices that respondent
municipality tapped to conduct an investigation never conducted such measurement
either.

B. Power to Generate and Apply Resources - Sec. 18, LGC


(Power of Taxation)
All LGUs are empowered to create their own sources of revenues and to
levy taxes, fees and charges subject to the provisions on local taxation consistent
with the basic policy of local autonomy. The power to tax is no longer vested
exclusively on Congress. Local legislative bodies are now given direct authority to
levy taxes, fees and other charges, pursuant to Section 5, Article X of the Philippine
Constitution. (NPC vs. City of Cabanatuan, 401 SCRA 259) The Sanggunian
concerned through an ordinance has the power to impose a tax, fee or charge. The
procedural requirements of public hearing and publication must be observed for
purposes of compliance with the requirements of due process.
Only guidelines and limitations that may be established by Congress can
define and limit such power of local governments. (Philippine Petroleum Corp. vs.
Municipality of Pililia, Rizal, 198 SCRA 82) See Section 133 of the LGC for
common limitations. The Constitutional mandate that every local government units
shall enjoy local autonomy, does not mean that the exercise of power by local
government units is beyond regulation of Congress. Thus, while each local
government unit is granted the power to create its own sources of revenue,
Congress, in the light of its broad power to tax, has the discretion to determine the
extent of the taxing powers of local government units consistent with the policy of
autonomy. (PHILRECA vs. Secretary of DILG, 403 SCRA 558)
Under existing law, local government units, in addition to having
administrative autonomy in the exercise of their functions, enjoy fiscal autonomy as
well. Fiscal autonomy means that local governments have the power to create their
own sources of revenue in addition to their equitable share in the national taxes
released by the national government, as well as the power to allocate their resources
in accordance with their own priorities. (Pimentel vs. Aguirre, 336 SCRA 201)

Under Section 133(o) of the LGC, local governments have no power to


impose tax, fees or charges on the National Government, its agencies and
instrumentalities, and local government units. However, indicative of legislative
intent to carry out the constitutional mandate of vesting broad powers to local
government units, the Local Government Code effectively withdrawn tax
exemption or incentives theretofore enjoyed by certain entities. (MERALCO vs.
Province of Laguna, 306 SCRA 750) The limited and restrictive nature of the tax
POWERS OF LOCAL GOVERNMENT UNITS /38

exemption privileges under the LGC is consistent with the State policy to ensure
autonomy of local government units. Hence, Cebu City has the power to collect
taxes from the MCIAA. (Mactan Cebu International Airport Authority vs. Marcos,
GR No. 120082, September 11, 1996)) But in MIAA vs. CA, GR No.155650, July
20, 2006, 495 SCRA 51, the Supreme Court declared that no taxes, fees, or charges
of any kind may be imposed by any local government unit against the National
Government, its agencies, or instrumentalities and that their properties shall not be
subject to levy, encumbrance, or sale. This would include real estate taxes on
properties intended for public use and for some public service.
One of the most significant provisions of the Local Government Code is the
removal of the blanket exclusion of instrumentalities and agencies of the national
government from the coverage of local taxation. Section 193 of the LGC provides
for withdrawal of tax exemption privileges by certain entities, including GOCCs,
except local water districts, cooperatives duly registered under RA 6938, non-stock
and non-profit hospitals and educational institutions. Although as a general rule,
LGUs cannot impose taxes, fees or charges of any kind on the National
Government, its agencies and instrumentalities, this rule now admits an exception,
i.e., when specific provisions of the LGC authorized the LGUs to impose taxes,
fees or charges on the aforementioned entities.
(NPC vs. City of Cabanatuan, 401 SCRA 259)
Section 133 of the LGC, was not intended to be so absolute a prohibition on
the power of LGUs to tax the National Government, its agencies and
instrumentalities. The exemptions from real property taxes are enumerated in
Section 234, which specifically states that only properties owned by the Republic
of the Philippines or any of its political subdivisions is exempted from payment of
the tax. Clearly, instrumentalities or GOCCs do not fall within the exception under
Section 234. The express withdrawal of all tax exemptions accorded to all persons
natural or juridical, as stated in Section 193 of the LGC applies, without
impediment to the GSIS. (City of Davao vs. RTC Br XII, Davao City 467 SCRA
280)
Section 193 of the LGC is indicative of the legislative intent to vest broad
taxing powers upon local government units and to limit exceptions from local
taxation to entities specifically provided therein. There is reasonable classification
under the LGC to justify the different tax treatment between electric cooperatives
covered by PD 269 as amended, and electric cooperatives under RA 6938. Sections
193 and 234 of the LGC permit reasonable classification as these exceptions are not
limited to existing conditions and apply equally to all members of the same class.
(PHILRECA vs. Secretary of DILG, 403 SCRA 558)
The grant of taxing powers of local government units by the Constitution
and the Local Government Code does not affect the power of Congress to grant
exceptions to certain persons, pursuant to a declared national policy. The legal
effect of the constitutional grant to local government means that in interpreting

POWERS OF LOCAL GOVERNMENT UNITS /39

statutory provisions on municipal taxing powers, doubts must be resolved in favor


of municipal corporations. Tax exemptions must be interpreted in strictissimi juris
against the taxpayer and liberally in favor of the taxing authority. (PLDT vs. City of
Davao, 363 SCRA 522)

Main sources of revenues of LGUs


A. Under the Constitution
1. Taxes, fees and charges. (Sec. 5, Art. X)
2. Share in the national taxes Internal Revenue Allotment (Sec. 6, Art. X)
3. Share in the proceeds of the utilization and development of the national
wealth within their areas. (Sec. 7, Art. X)

Section 4 of the Administrative Order 372 which directs the


withholding of 10% of the local governments Internal Revenue Allotments
pending the assessment and evaluation by the Development Budget
Coordinating Committee, although temporary, was held by the Supreme
Court unconstitutional. A basic feature of local fiscal autonomy is the
automatic release of the shares of LGUs in the National internal revenue.
This is mandated by no less than the Constitution.
The Local Government Code specifies further that the release shall
be made directly to the LGU concerned within five (5) days after every
quarter of the year and shall not be subject to any lien or holdback that
may be imposed by the national government for whatever purpose. Such
withholding by virtue of an administrative fiat clearly contravenes the
Constitution and the law. (Pimentel vs. Aguirre, 336 SCRA 201) To allow
the President to withhold the IRA share of LGUs would contravene the
declared policy on local autonomy. Devolution includes transfer of
resources, including IRA share.
Likewise, in Batangas vs. Romulo, 429 SCRA 736, its was held that
under the same constitutional provision, the legislature like the executive, is
mandated to ensure that the just share of the local government in the
national taxes are automatically released and that it is barred from
withholding the release of the IRA through the General Appropriations Act,
the same being an inappropriate provision.
As the Constitution lays upon the executive the duty to
automatically release the just share of the local governments in the national
taxes, so it enjoins the legislature not to pass laws that might prevent the
executive from performing this duty. Since Article X, Section 6 of the
Constitution only just share of local governments is qualified by the words
as determined by law and not the release thereof, the plain implication is
that Congress is not authorized by the Constitution to
POWERS OF LOCAL GOVERNMENT UNITS /40

hinders or impede the automatic release of the IRA. (ACORD vs. Zamora,
459 SCRA 578) In Lucman vs. Malawi, 511SCRA 268, it was held that the
right to demand for the funds belongs to the local government itself through
the authorization of their Sanggunian.

B. Under the Local Government Code


1. Floating of Bonds
2. Grants/Aids

Fundamental Principles on Local Taxation


1. Taxation shall be uniform in each local government unit;
2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on the taxpayers ability
to pay;
b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive, or confiscatory; and
d. not be contrary to law, public policy, national economic policy, or in
restraint of trade.
3. The collection of taxes, fees, charges and other impositions shall in no case
be let to any private persons;
4. The revenue collected pursuant to the provisions of the LGC shall inure
solely to the benefit of, and be subject to disposition by, the local
government unit levying the tax, fee, charge or other imposition unless
otherwise specifically provided herein; and
5. Each local government unit shall, as far as practicable, evolve a progressive
system of taxation.

Public hearings are conducted by legislative bodies to allow interested


parties to ventilate their views on a proposed law or ordinance, but these views are
not binding on the legislative bodies parties who participate in public hearings to
give their opinions on a proposed ordinance should not expect that their views
would be patronized by their lawmakers. (Hagonoy Market Vendors Association vs.
Municipality of Hagonoy, Bulacan, 376 SCRA376)
Failure of the City of Manila to follow the procedure in enactment of tax
measures as mandated by Section 188 of the Local Government Code, in that they
failed to publish Tax Ordinance No. 7988 for three consecutive days in a newspaper
of general circulation renders the same null and void. If an order or law sought to
be amended is invalid, then it does not legally exist, there should be no occasion or
need to amend it. (Coca-cola Bottlers Philippines, Inc. vs. City of Manila, 493
SCRA 279)

POWERS OF LOCAL GOVERNMENT UNITS /41

Where the Secretary of Justice reviews, pursuant to law, a tax measure


enacted by the local government unit to determine if the officials performed their
functions in accordance with law, that is, with the prescribed procedure for the
enactment of tax ordinances and the grant of powers under the Local Government
Code, the same is an act of mere supervision, not control. While the Secretary of
Justice is authorized to review the constitutionality or legality of a tax ordinance
and if warranted, to revoke it on either or both grounds, he cannot substitute his
own judgment for that of the local government. (Drilon vs. Lim, 235 SCRA 135)
An appeal of a tax ordinance or revenue measures should be made to the
Secretary of Justice within 30 days from effectivity of the ordinance. Failure of a
taxpayer to interpose the requisite appeal to the Secretary of Justice is fatal to its
complaint of refund. (Jardine Davies Insurance Brokers, Inc. vs. Aliposa, 398
SCRA 176) And even during the pendency of such appeal, the effectivity of the
assailed ordinance shall not be suspended. (Hagonoy Market Vendors Association
vs. Municipality of Hagonoy, Bulacan, 376 SCRA376)
The time frame fixed by law for parties to avail of their legal remedies
before competent courts is not a mere technicality that can be easily brushed
aside the periods stated in Sec. 187 of the LGC are mandatory. (Id.)
Sec. 6c.04of the Municipal Revenue Code and Sec. 191 of the LGC limiting
the percentage of increase that can be imposed apply to tax rates, not rentals. (Id.)
A memorandum issued by the Secretary of Justice directing the Chief State
Counsel to refrain from acting on or accepting appeals filed under Sec. 187 of the
Local Government Code and to inform the appellants to file their appeal directly
with the court amounted to an abdication by the Secretary of Justice of his
jurisdiction over the appeal such that any subsequent action before the RTC cannot
be anything but an original action whereby the function of the trial court cannot be
limited to reviewing the evidence adduced before the Secretary of Justice. (City of
Olongapo vs. Stallholders, 343 SCRA 705)
Shares of LGUs in the Proceeds of National Taxes
The share of the LGU in Internal Revenue Taxes is 40%. The 40% Internal
revenue Allotment is allocated to LGUs as follows: for provinces and cities 23%;
for municipalities 34%; for barangays 20%. No less than 20% of the Internal
Revenue Allotment is allotted for development project by the local unit from the
IRA.

Shares in National Wealth


Forty (40%) of the gross collection from mining taxes, royalties, forestry
and fishery charges, and from each share in any joint effort in utilizing and
developing the national wealth within the LGUs jurisdiction and shall be remitted
without need for further action to the local treasurer on a quarterly basis within five
(5) days after the end of every quarter.

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LGUs shall receive 1% of the gross sale or receipts of the preceding
calendar year and 40% of taxes, fees or charges that GOCCs would have paid if not
tax exempt, whichever is higher.

How National Wealth is Distributed


If the national wealth is located in one province, the province shall receive
20%, the component city/municipality shall receive 45% and the barangays 35%.
If the national wealth is located in two or more LGUs, distribution shall be
based on the following: Population 70% and Land Area 30%.
If the national wealth is located in Highly Urbanized City or Independent
Component City, the HUC or ICC shall receive 65% and the barangays shall
receive 35%.

Fundamental Principles of Local Fiscal Administration


Among the fundamental principles governing the financial affairs,
transactions and operations of the LGUs are:
1. No money shall be paid out of the local treasury except in pursuance of an
appropriation ordinance or law;
2. Local government funds and monies shall be spent solely for public
purposes;
Section 335 of RA 7160 is clear and specific that no public money
shall be appropriated or applied for private purposes. This is in consonance
with the fundamental principle in local fiscal administration that local
government funds and monies shall be spent solely for public purposes. The
use of LGU funds for the widening and improvement of privately-owned
sidewalks is unlawful and it directly contravenes Section 335 of RA 7160.
Only the construction, improvement, repair and maintenance of
infrastructure facilities owned by the LGU may be bankrolled with local
government funds. (Albon vs. Fernando, 494 SCRA 141, GR No. 148357,
June 30, 2006)
3. Local revenue is generated only from the sources expressly authorized by
law or ordinance, and collection thereof shall at all times be acknowledged
properly;
4. All monies officially received by a local government officer in any capacity
or on any occasion shall be accounted for as local funds, unless otherwise
provided by law;
5. Trust funds in the local treasury shall not be paid out except in fulfillment of
the purpose for which the trust was created or the funds received.

POWERS OF LOCAL GOVERNMENT UNITS /43


NOTE: Pursuant to Section 16 and in the proper exercise of the corporate
powers of local government units as provided for under Section 22, the
Sangguniang Panlalawigan/Panlungsod/Bayan shall approve ordinances and pass
resolutions for an efficient and effective local government, in this connection shall
adopt measures to protect the inhabitants of the province/city/municipality from
harmful effects of man - made or natural disasters and calamities, and to provide
relief services and assistance for victims during and in the aftermath of said
disasters and calamities and their return to productive livelihood following said
events. (Sections 648,458 and 447 (a)(1)(iv), LGC)

C. Eminent Domain (Sec. 19, LGC)


Nature. The right of eminent domain is usually understood to be an
ultimate right of the sovereign power to appropriate any private property within its
territorial sovereignty for a public purpose upon payment of just compensation. It is
the Governments right to expropriate, in the nature of compulsory sale to the State,
private property for public use. Eminent domain is a fundamental State power that
is inseparable from sovereignty. (The City of Cebu vs. Dedamo, 380 SCRA)
The power of eminent domain is inherently possessed by the State. It is
lodged in the legislative branch of the government which has the authority to
delegate the exercise thereof. By delegation, the power may also be possessed by
the President, administrative bodies, local government units, and even to private
enterprises performing public services, subject only to Constitutional limitations.
Indeed, local government units themselves have no inherent power of eminent
domain and can exercise it only when expressly authorized by the legislature.
Section 19 of the LGC prescribes the delegation by Congress of the
power of eminent domain and lays down the parameters for its exercise. Thus,
strictly speaking, the power of eminent domain delegated to an LGU is in reality
not eminent but inferior since it must conform to the limits imposed by the
delegation and thus partakes only of a share in eminent domain. The national
legislature is still the principal of the LGUs and the latter cannot go against the
principals will or modify the same. (Beluso vs. Municipality of Panay, Capiz, 498
SCRA 113)
An expropriation suit does not involve the recovery of sum of money. It
deals with the exercise by the government of its authority and right to take property
for public use. (Bardillon vs. Brgy. Masili of Calamba, Laguna, 402 SCRA 440)
Purposes and Limitations. The taking of private property by local
government units shall be for public use, or purpose, or welfare, for the benefit of
the poor and the landless. The exercise by LGUs of the power of eminent domain
is not absolute and is subject to the usual constitutional limitations such as
necessity, private property, taking, public use, just compensation and due process of
law and equal protection of the law. (Barangay Sindalan vs. CA, GR No. 150640,
March 22, 2007)

POWERS OF LOCAL GOVERNMENT UNITS /44


Taking. The taking of private property is not absolute. Government may not
capriciously or arbitrarily choose which private property should be expropriated.
(Langcao vs. City of Cebu, 440 SCRA 279)
Coverage. Only private property can be the subject of expropriation.
Private property already devoted to public use can still be a subject of expropriation
by Congress but not by LGUs. (City of Manila vs. Chinese Community, 40 Phil
349)
Corollary to the expanded notion of public use, expropriation is not
anymore confined to vast tracts of land and landed estates. (Province of Camarines
Sur vs. CA, 222 SCRA 173) It is therefore of no moment that the land sought to be
expropriated in this case is less than half a hectare only. (Pulido vs. CA, 122 SCRA
63) A property that is intended for the construction of a place of religious worship
and a school for its members may still be expropriated. (Jesus is Lord Christian
School Foundation vs. Municipality of Pasig MM, 466 SCRA 235)
Genuine Necessity. The right to take private property for public purposes
necessarily originates from necessity and the taking must be limited to such
necessity. The foundation of the right to exercise eminent domain is genuine
necessity and that necessity must be of public character and must also be shown to
exist. (Masikip vs. City of Pasig, 479 SCRA 391) The ascertainment of the necessity
must precede or accompany and not follow, the taking of the land. (City of Manila
vs. Chinese Community, 40 Phil 349) As a rule, the determination of
whether there is genuine necessity for the exercise of the power of eminent domain
is a justiciable question, including the exercise by LGUs. However, when the power
is exercised by the legislature, the question of necessity is essentially a political
question. (Municipality of Meycauayan vs. IAC, 157 SCRA 640 and Manapat vs.
CA, 536 SCRA 32) There is a failure to establish that there is genuine necessity
when the basis for passing the ordinance authorizing the expropriation indicates
that the intended beneficiary is a private non-profit organization, and not residents
of the locality the purpose thereof is clearly not public. (Masikip, supra.) Where
property is expropriated for the purpose of constructing a road, the expropriator is
not mandated to comply with the essential requisites for an easement of right of
way made under the New Civil Code case law has it that in the absence of
legislative restriction, the grantee of the power of eminent domain may determine
the location and route of the land to be taken unless such determination is
capricious and wantonly injurious. (Jesus is Lord Christian School Foundation vs.
Municipality of Pasig MM, 466 SCRA 235) The testimony that although there were
other ways through which can enter the vicinity, no vehicle, however, especially
fire trucks, could enter the area except through the property sought to be
expropriated is more than sufficient to establish that there is genuine necessity for
the construction of a road in the area absolute necessity is not required, only
reasonable and practical necessity will suffice. (Ibid.)
POWERS OF LOCAL GOVERNMENT UNITS /45
Public use, purpose, welfare; not for private use. In this jurisdiction,
public use is defined as whatever is beneficially employed for the community.
Expropriation is justified so long as it is for the public good and there is genuine
necessity of public character. That only a few could actually benefit from the
expropriation of the property does not diminish its public use character. It is simply
not possible to provide all at once land and shelter for all who need them.
(Sumulong vs. Guerrero, 154 SCRA 461)
The expropriation of property intended for the establishment of a pilot
development center and housing project of the Province of Camarines Sur was held
valid in consonance with the public purpose requirement of the Constitution.
Likewise, local government units can expropriate agricultural lands without prior
authority from the Department of Agrarian Reform as the determination of the
public use of the property subject for expropriation is considered an expression of
legislative policy. (Province of Camarines Sur vs. CA, 222 SCRA 173)
Conversely, expropriation can not be exercised for private use or purpose.
Where the property sought to be expropriated was allegedly intended to benefit the
residents of Sitio or Purok Paraiso but it would actually benefit the owners of a
subdivision and incidental benefit to homeowners within the sitio, the same
involves expropriation of private property for the benefit of private individual
which is clearly proscribed by the constitution. In this case, the owners of the
subdivision will be able to circumvent the commitment to provide road access to
the subdivision and relieved from spending their funds for a right of way. Public
funds can be used only for a public purpose. This proposed condemnation,
government funds would be employed for the benefit of a private individual
without any legal mooring. (Barangay Sindalan vs. CA, supra.)

Just Compensation. The government must pay the owner thereof just
compensation as consideration therefore. Just compensation means the fair market
value of the property or the equivalent for the value of the property at the time of its
taking. Anything beyond, that is more anything short of that is less, than just
compensation.
When eminent domain is exercised by a local government unit, the amount
to be paid for the expropriated property shall be determined by the proper court,
based on the fair market value of the property at the time of actual taking. While
Section 4 of Rule 67 of the Rules of Court provides that just compensation shall be
determined at the time of filing of the complaint for expropriation, such law cannot
prevail over Section 19 of RA 7160 which is a substantive law. (The City of Cebu
vs. Dedamo, 380 SCRA) It was also held that the value of the property shall be
ascertained as of the date it was actually taken, because it is as of that time that the
real measure of the owners loss may be fairly adjudged. (Nepomuceno vs. City of
Surigao, GR No. 146091, July 28, 2008) Once the value of the property is fixed by
the court, the amount shall earn interest at the legal rate until full payment is
effected. (Ibid.)
POWERS OF LOCAL GOVERNMENT UNITS /46
An expropriation suit falls within the jurisdiction of the RTC since it is
incapable of pecuniary estimation. (Barangay San Roque, Talisay, Cebu vs. Heirs
of Francisco Pastor, 334 SCRA 127 and Bardillon vs. Brgy. Masili of Calamba,
Laguna, supra)

The additional limitations on the exercise of the power of eminent domain


by local government units are, as follows:
1. Exercised only by the local chief executive, acting pursuant to a valid
ordinance;
Expropriation is the procedure or action for carrying out that right
of eminent domain. The right extends to property partly or entirely personal
and the procedure is substantially the same.
An LGU shall file a complaint for expropriation on the strength of
an ordinance and not a mere resolution passed by the Sanggunian.
(Municipality of Paranaque vs. VM Realty Corp., 292 SCRA 676; Heirs of
Suguitan vs. City of Mandaluyong, 328 SCRA 137 and Antonio vs.
Geronimo, 476 SCRA 340) The legislative acts of the Sangguniang
Panlungsod in the exercise of its law-making authority are denominated
ordinances. (Langcao vs. City of Cebu, 400 SCRA 279
The promulgation of the ordinance authorizing the local chief
executive to exercise the power must be promulgated prior to the filing of
the complaint for eminent domain with the proper court, and not after the
court shall have determined the amount of just compensation to which the
defendant is entitled. (Heirs of Suguitan, supra)
Sec. 9 of RA 7279, otherwise known as the Urban Development and
Housing Act of 1992, provides for priorities in the acquisition of land for
socialized housing. Private lands rank last in the order of priority for
purposes of socialized housing. Expropriation proceedings are to be
resorted to only when the other modes of acquisition have been exhausted.
Compliance with these conditions must be deemed mandatory because these
are the only safeguards in securing the right of owners of private property to
due process when their property is expropriated for public use. (Filstream
International Inc. vs. CA, 284 SCRA 716 and Langcao vs. City of Cebu, 440
SCRA 279))
Expropriation as a mode of acquiring lands for socialized housing
under RA 7279 is subject to two conditions:
1) it shall be resorted to only when the other modes of acquisition have
been exhausted; and
2) parcels of land owned by small property owners are exempt from such
acquisition. (City of Mandaluyong vs. Aguilar, 350 SCRA 487)

POWERS OF LOCAL GOVERNMENT UNITS /47


RA 7279 expressly exempted small property owners from
expropriation of their lands for urban land reform. The two elements
defining small property owners are:
1) those owners of real property whose property consists of residential
lands with an area of not more than 300 square meters in highly
urbanized cities and 800 square meters in other urban areas, and
2) they do not own real property other than the same.

2. For public use or purpose or welfare, for the benefit of the poor and the
landless;
The power of eminent domain must not be exercised arbitrarily even
if purposed for resolving a critical problem such as squatting. (Antonio vs.
Geronimo, 476 SCRA 340)

3. Only after a valid and definite offer had been made to, and not accepted by,
the owner.
The purpose of the requirement of a valid and definite offer to be
first made to the owner is to encourage settlements and voluntary
acquisition of property needed for public purposes in order to avoid the
expense and delay of a court action. It permits the land owner to receive full
compensation, and the entity acquiring the property, immediate use and
enjoyment of the property. A single bona fide offer that is rejected by the
owner will suffice. (Jesus is Lord Christian School Foundation vs.
Municipality of Pasig MM, 466 SCRA 235)

A letter offered to prove that municipalitys desire or intent to


acquire a property for a right of way does not prove that the LGU made
definite and valid offer to acquire the property for public use as an access
road before filing the complaint for expropriation. In the absence of
competent evidence that indeed, the municipality made a definite and valid
offer to all co-owners of the property, the declaration in an ordinance that
the property owners were notified of the intent to purchase the same for
public use as a municipal road is not in compliance with Section 19 of the
LGC. (Ibid.)
There are two phases of an expropriation proceedings:
1. the determination of the authority of the plaintiff local government unit
to exercise the power of eminent domain and the propriety of its exercise,
which ends either by an order of dismissal or condemnation; and
2. the determination by the court of just compensation for the property sought to be
taken. (Barangay San Roque, supra)

POWERS OF LOCAL GOVERNMENT UNITS /48


In expropriation proceedings involving local government units, the
requisites for authorizing immediate entry are as follows: (1) the filing of complaint
for expropriation sufficient in form and substance, and (2) deposit of the amount
equivalent to 15% of the fair market value of the property to be expropriated based
on its current tax declaration. Hearing is still to be held to determine whether or not
petitioner indeed complied with the requirements provided in RA 7279. (City of
Iloilo vs. Legaspi, 444 SCRA 269)
The issuance of the writ of possession becomes a ministerial matter for the
expropriation court once the two foregoing requisites are established. (Bardillon vs.
Brgy. Masili of Calamba, Laguna, 402 SCRA 440) The determination of whether
the taking of the property is for a public purpose is not a condition precedent before
the court may issue a writ of possession. (Francia vs. Municipality of Meycauayan,
GR No. 170432,March 24, 2008)

D. Reclassification of lands Sec. 20


A city or municipality may, through an ordinance passed after conducting
public hearings for the purpose, authorize the reclassification of agricultural lands
and provide for the manner of their utilization and disposition:
1. when the land ceases to be economically feasible and sound for
agricultural purposes as determined by the Department of Agriculture,
or
2. where the land shall have substantially greater economic value for
residential, commercial or industrial purposes, as determined by the
sanggunian; provided that such reclassification shall be limited to the
following percentage of the total agricultural land area at the time of the
passage of the ordinance:
a. for highly urbanized cities and independent component cities: 15%
b. for component cities and 1st to 3rd class municipalities: 10% and
c. for 4th to 6th class municipalities: 5%; provided that agricultural
land distributed to land reform beneficiaries shall not be affected by
such reclassification.

E. Closure and Opening of Roads


A local government unit may, pursuant to an ordinance, permanently or
temporarily close or open any local road, alley, park, or square falling within its
jurisdiction, provided that in case of permanent closure, such ordinance must be
approved by at least 2/3 of all the members of the sanggunian, and when necessary,
an adequate substitute for the public facility shall be provided. Temporary closure
may be made during an actual emergency, fiesta celebrations, public rallies, etc.

POWERS OF LOCAL GOVERNMENT UNITS /49

Additional limitations in case of permanent closure:


1. adequate provision for the maintenance of public safety must be made;
and
2. the property may be used or conveyed for any purpose for which other
real property may be lawfully used or conveyed, but no freedom park
shall be closed permanently without provision for its transfer or
relocation to a new site.
Properties of the local government which are devoted to public service are
deemed public and are under the absolute control of Congress. Hence local
governments have no authority whatsoever to control or regulate the use of public
properties unless specific authority is vested upon them by Congress. Article 424 of
the Civil Code lays down the basic principle that properties of public dominion
devoted to public use and made available to the public are outside the commerce of
man and cannot be disposed o or leased by the local government unit to private
persons.
Aside from the requirement of due process which should be complied with
before closing a road, street or park, the closure should be for the sole purpose of
withdrawing the road or other public property from public use when the
circumstances show that such property is no longer intended or necessary for public
use or public service. When it is already withdrawn from public use, the property
then becomes a patrimonial property of the local government concerned. (Article
422; Cebu Oxygen vs Bercilles, 66 SCRA 481) It is only then that a municipality
can use or convey them for any purposes for which other real property belonging to
the local government unit concerned might be lawfully used or conveyed. Thus, the
roads and street which are available to the public in general and ordinarily used for
vehicular traffic are still considered public property devoted to public use. In such
case, the municipality is bereft of any authority to close them for the establishment
of a flea market. (Macasiano vs. Diokno 212 SCRA 464)

F. Naming of LGUs, Public Places, Streets & Structures


The Sangguniang Panlalawigan, Sangguniang Panlungsod and Sangguniang
Bayan, in consultation with the National Historical Commission, may now change
the name of the following within their respective territorial jurisdiction: component
cities and municipalities, and barangays, roads avenues, boulevards thoroughfares
and bridges, public schools, hospitals, health centers, and any other public place or
building. (Sec. 13 LGC). The same section of the Code provides the following
guidelines in the naming of the foregoing local government units, institutions,
places, or buildings, to wit:
1. They shall not be named after a living person, nor may a change of
name be made unless for a justifiable reason;

POWERS OF LOCAL GOVERNMENT UNITS /50


2. Such change of name be made not oftener than once every ten years;
3. Those with historical, cultural or ethnic significance shall not be
changed unless by unanimous vote of the sanggunian concerned and in
consultation with the NHI;
4. A change of name of a public school shall be made only upon the
recommendation of the local school board concerned;
5. A change of name of public hospitals, health centers, and other health
facilities shall be made only upon the recommendation of the local
health board concerned;
6. A change of name of any local government unit shall be effective only
upon ratification in a plebiscite conducted for the purpose in the
political unit directly affected;
7. In any change of name, the Office of the President, the representative
of the legislative district concerned, and the Philippine Postal
Corporation.
The National Historical Commission issued the following additional
guidelines:
1. Honorific titles like Don or Father or Jr. or Sr. should be
deleted in naming or renaming of streets and/or plazas for practical,
aesthetic and historico-literary reasons;
2. A genuine, indigenous, non-hispanized spelling should be used at all
times with reference to the naming or renaming of streets and /or
plazas the spelling of which does not conform to official Pilipino
orthography;
3. The Filipino terminology, should be encouraged in naming or
renaming of streets and/or plazas;
4. Street names with indigenous names should be retained. However,
those with no historical significance should be replaced; and
5. Streets bearing the names of religious personalities identified with
national movement will be retained or to be recommended for street
names.

G. Settlement of Boundary Disputes


Section 118 of the Code spells out the policy that boundary disputes
between and among local government units shall, as much as possible, be settled
amicably.
Nature of the Power
The power of the provincial boards to settle boundary disputes is of an
administrative nature involving, as it does, the adoption of means and ways to
carry into effect the law creating said municipalities. It is a power to fix a common
boundary, order to avoid or settle conflicts of jurisdiction between
adjoining municipalities. The agreement between the municipalities of Jimenez
POWERS OF LOCAL GOVERNMENT UNITS /51
and Sinacaban (embodied in a resolution of a provincial board declaring certain
barrios part of one or another municipality) is invalid as it would effectively amend
EO No. 258 creating the Municipality of Sinacaban. It is contrary to the
technical description of the territory of a municipality as per EO 258, and
therefore not binding. The power of the Sangguniang Panlalawigan to settle
boundary disputes is limited to implementing the law creating the municipality and,
any alteration of boundaries not in accordance with the law is not implementation
but amendment of the law, which would exceed their authority. (Jimenez vs. Baz,
265 SCRA 182)
Jurisdiction
The Local Government Code confers jurisdiction in settling boundary
disputes to the following:
1. Sangguniang Panlunsod or Sangguniang Bayan those involving
two or more barangays in the same city or municipality;
2. Sangguniang Panlalawigan those involving two or more
municipalities within the same province;
3. Joint Sanggunians of the provinces concerned those involving
municipalities or component cities of different provinces; and
4. Joint Sanggunians of the parties those involving a component city
or municipality on the one hand and a highly urbanized city on the
other, or two or more highly urbanized cities.

Boundary disputes involving municipalities or component cities of different


provinces shall be jointly referred for settlement to the Sanggunians of the
provinces concerned. (Section 118, LGC) The RTC cannot exercise appellate
jurisdiction over the case since there was no petition that was filed and decided by
the Sanggunian panlalawigans of Davao Oriental and Surigao del Sur. Neither can
the RTC assume original jurisdiction over the boundary dispute since the LGC
allocates such power to the sanggunian panlalawigans of Davao Oriental and
Surigao del Sur. (Calanza vs. PICOP, GR No. 146622, April 24, 2009)
When LGC is Silent. Section 118(d) of the LGC applies to a situation in
which a component city or a municipality seeks to settle a boundary dispute with a
highly urbanized city, not an independent component city. While Kanaga is a
municipality, Ormoc is an independent component city. Clearly then, the procedure
referred to in Section 118(d) does not apply to them. Since there is no legal
provision specifically governing jurisdiction over boundary disputes between a
municipality and an independent component city of the same province, the general
rule governing jurisdiction should be used. The applicable
provision is found in Section 19 (6) of BP 129, the Judiciary Reorganization Act of
1980, as amended by RA 7691, which provides the Regional Trial Court shall
exercise exclusive original jurisdiction in cases not within the exclusive jurisdiction
of any court, tribunal, person or body exercising judicial or quasi-judicial functions.
(Municipality of Kanaga vs. Madrona, 402 SCRA 330)
POWERS OF LOCAL GOVERNMENT UNITS /52
Procedure
(1) Amicable settlement - Boundary disputes between and among local
government units shall, as much as possible, be settled amicably.
(2) Formal Hearing - In the event that the sanggunian fails to effect an
amicable settlement within 60 days from the date the dispute was referred to it, it
shall issue a certification to that effect. The dispute shall then be formally tried by
the sanggunian concerned which shall decide the issue within 60 days from the date
of certification.
In case no settlement of boundary dispute between municipalities is made,
the dispute should be elevated to the RTC of the province. Failure of the court to
decide within the period prescribed by law does not divest it of its jurisdiction to
decide the case but only makes the judge thereof liable for possible administrative
sanction. The Supreme Court declared that the RTC was correct when it ordered a
relocation survey to determine to which municipality the barangays belonged.
(Jimenez vs. Baz, 265 SCRA 182)

(3) Appeal - within the time and manner prescribed by the Rules of Court,
any party may elevate the decision to the sanggunian concerned to the proper
Regional Trial Court having jurisdiction over the area in dispute which shall decide
the appeal within 1 year from the filing thereof.
In Municipality of Sta. Fe vs. Municipality of Aritao, GR No.140474,
September 21, 2007, it was held that it is only in the exercise of its appellate
jurisdiction can the proper RTC decide the case, on appeal, should any party
aggrieved by the decision of the Sangguniang Panlalawigan elevate the same.

H. Authority Over Police Units


Section 6 of Art. XVI of the Constitution mandates the State to establish
and maintain one police force which shall be national in scope and civilian in
character, to be administered and controlled by a national police commission.
Under RA 6975, local government units exercise the following authority over the
PNP within their territorial jurisdiction:
(1) Through the Local Chief Executive, except barangay, the power to
appoint the Municipal/City Chief of Police or Provincial Director;
(2) Through the Local Chief Executive, except barangay, the
operational control and supervision over the PNP; and
(3) Through the Peoples Law Enforcement Board, a local special body,
exercises concurrent disciplinary jurisdiction over erring PNP
personnel.

POWERS OF LOCAL GOVERNMENT UNITS /53


LOCAL LEGISLATIVE POWER
Local legislative power shall be exercised by:
(1) Sangguniang Panlalawigan for the province
(2) Sangguniang Panlungsod for the city
(3) Sangguniang Bayan for the municipality, and
(4) Sangguniang Barangay for the barangay
Two categories of power conferred to the Sanggunian by the Local Government
Code:
(1) Legislative Power the power to propose, enact, amend and repeal
ordinances
(2) Quasi-judicial Power except sangguniang barangay, the power to:
(a) to settle boundary disputes, and
(b) the power to investigate and impose disciplinary actions to the
elective officials upon the next lower level of local government
units.

There is no provision in the Constitution or in the Local Government Code


granting local legislative bodies the power to subpoena a witness and the power to
cite them for contempt, either pursuant to its legislative power or quasi-judicial
power. (Negros Oriental II Electric Cooperative, Inc. vs. Sangguniang Panlungsod
of Dumaguete, 156 SCRA 421)

Products of legislative action


(1) Ordinance the legislative acts of the sanggunian in the exercise of its
law-making authority are denominated ordinances. They prescribe a
permanent rule of conduct; with force and effect of laws and requires
approval by the local chief executive
(2) Resolution an expression of sentiments of the members of the
sanggunian; they are of temporary character and does not have the force
and effect of a law

Presiding Officer
The vice-governor, the vice-mayor, and the punong barangay shall be the
presiding officer of the sanggunian but shall vote only in case of tie. In case of
inability of the presiding officer, the members shall elect a temporary presiding
officer from among themselves.
Being the acting governor, the Vice-governor cannot simultaneously
exercise the duties of the latter, since the nature of the duties of the Provincial
Governor calls for a full-time occupant to discharge them. The creation of a
temporary vacancy in the office of the Governor creates a corresponding vacancy in
the office of the Vice - governor whenever the latter acts as Governor by virtue

POWERS OF LOCAL GOVERNMENT UNITS /54


of such temporary vacancy. This event constitutes an inability on the part of the
regular presiding officer (Vice-governor) to preside over the SP sessions, which
thus calls for the operation of the remedy set in Sec. 49(b) of the Local Government
Code the election of a temporary presiding officer from among themselves.
The continuity of the Acting Governors (Vice-governor) powers as presiding
officer of the SP is suspended so long as he is in such capacity. (Gamboa vs.
Aguirre, GR No. 134213, July 20, 1999)
A temporary presiding officer who merely steps into the shoes of the
presiding officer could not have greater power than that possessed by the latter who
can vote only in case of tie. Thus, while acting as presiding officer, a Board
Member may not, at the same time be allowed to exercise the rights of a regular
board member, including that of voting even when there is no tie to break. (Zamora
vs. Caballero, 420 SCRA 384)

Sessions
The minimum number of sessions shall be once a week for the sanggunang
panlalawigan, sangguniang panlungsod and sangguniang bayan, and twice a month
for the sangguniang barangay. On the first day of session immediately following
the election of its members, the sanggunian shall by resolution, fix the day, time
and place of its regular sessions.
A special session may be called by the local chief executive or a majority of
the sanggunian members. Unless concurred in by two-thirds vote of the members
present, no matter may be reconsidered at the special session except those stated in
the notice. A majority of all the members of the sanggunian shall constitute a
quorom.

Quorom
A majority of all members of the Sanggunian who have been elected and
qualified shall constitute a quorum to transact official business. (Section 53, LGC)
Quorom is defined as that number of members of a body which, when
legally assembled in their proper places, will enable the body to transact its proper
business or that number which makes a lawful body and gives it power to pass upon
a law or ordinance or do any valid act. (Zamora vs. Caballero, 419 SCRA 384)
Majority when required to constitute a quorum, means the number greater than
half or more than half of any total. (Id.)
The entire membership, including the presiding officer and ex-officio
members, must be taken into account in computing the quorum of the sangguniang
panlalawigan, for while the Constitution merely states that majority of each House
shall constitute a quorum Section 53 of the local Government Code is more
exacting as it requires that the majority of all members of the Sanggunian who
have been elected and qualified shall constitute a quorum. (Id.)

POWERS OF LOCAL GOVERNMENT UNITS /55


Making and approval of ordinances
On the first regular session following the election of its members and within
90 days thereafter, the sanggunian concerned shall adopt or update its existing rules
of procedure which shall provide for the following:
(1) organization of the sanggunian, election of its officers and creation
of standing committees;
(2) the order and calendar of business for each session;
(3) the legislative process;
(4) the parliamentary procedures;
(5) discipline of members, and other rules as the sanggunian may adopt.
The Local Government Code requires is the on its first regular session xxx
the Sanggunian concerned shall adopt or update its existing rules or procedures.
(Section 50, LGC) and by resolution, fix the day, time and place of its regular
sessions (Section 52, LGC). The law does not require the completion of the
updating or adoption of the internal rules of procedure before the sanggunian could
act on any other matter like the enactment of ordinance. It simply requires that the
matter of adopting or updating the internal rules of procedure be taken up during
the first day of session. There is nothing in the language thereof that restricts the
matters to be taken up during the first regular session merely to the adoption of
updating of the house rules. If it were the intent of Congress to limit the business of
the local council to such matters, then it would have done so in clear and
unequivocal terms. But as it is, there is no such intent. (Malonzo vs. Zamora,
311SCRA 224) An ordinance may be enacted in one session day because the Local
Government Code does not prohibit the same, unlike in Congress where a bill must
undergo three readings on separate days. (Ibid.)
An ordinance shall be approved by the local chief executive by affixing his
signature in each and every page thereof. The governor or mayor may veto any item
in the following cases:
(1) Appropriations ordinance
(2) Ordinance adopting a local development plan and public investment
program
(3) Ordinance directing the payment of money or creating liability.

The grounds for veto are:


(1) the ordinance is ultra vires, or
(2) that it is prejudicial to public welfare.

POWERS OF LOCAL GOVERNMENT UNITS /56


How a vetoed ordinance can become a law
(1) The sanggunian may override the veto by two-thirds vote of all its
members.
(2) Failure of the Local Chief Executive to communicate the veto to the
sanggunian within 15 days in the case of a province and 10 days in the case
of city or municipality. The ordinance shall be deemed approved as if he
signed it.

Ordinances enacted by the Sangguniang barangay shall, upon approval by a


majority of all its members, be signed by the punong barangay. The latter has no
veto power.
In De los Reyes vs. Sandiganbayan 281 SCRA 631, where a municipal
mayor was charged with falsification of a public document for approving
purportedly appropriating money to pay for the terminal leave of two municipal
employees when actually no such resolution was actually passed, he argued that his
signature in the resolution was merely ministerial. His contention was
unmeritorious because the grant of the veto power accords the mayor to sustain a
resolution or to veto it.

Review of Ordinances
The sangguniang panlalawigan shall review ordinances and resolution of
cities and municipalities to determine if they are within their power. (Sec. 56) The
sangguniang panlungsod or bayan shall review sangguniang barangay ordinances to
determine if they are lawful. (Sec. 57)
The sanggunian concerned shall review the ordinance within 30 days from
receipt thereof. If no action is taken within 30 days, the ordinance is presumed
consistent with the law, and therefore valid and deemed approved.
The Sangguniang Panlalawigan was without authority to review and
disapprove a Sangguniang Bayan resolution authorizing the mayor to expropriate a
lot for a farm center and government sports facilities on the ground that the
expropriation was unnecessary since there were still available lots for the purpose.
The municipality has the power to exercise the power of eminent domain pursuant
to the Local Government Code. The resolution is valid and can be used as authority
to petition for the condemnation of the property of petitioners. (Moday vs. CA, 268
SCRA 586)
RA 7942 does not give MMDA the authority to review land use plans and
zoning ordinances of cities and municipalities. This is only found in its
implementing rules which made a reference to EO 72. EO 72 expressly refers to
comprehensive land use plans (CLUPs) only. Ordinance No. 8027 is admittedly not
a CLUP nor intended to be one. Instead it is a very specific ordinance which
reclassified the land use of a defined area in order to prevent the massive effects of
a possible terrorist attack. It is Ordinance No. 8119 which was explicitly
POWERS OF LOCAL GOVERNMENT UNITS /57
formulated as the Manila (CLUP) and Zoning Ordinance of 2006 CLUPs are the
ordinances which should be submitted to the MMDA for integration in its
metropolitan physical framework plan and approved by the HLURB to ensure that
they conform with national guidelines and policies. (SJS vs. Atienza, 545 SCRA 92)
Enforcement of disapproved
ordinances/resolutions
Any attempt to enforce an ordinance or resolution approving the local
development plan and public investment program, after the disapproval thereof,
shall be sufficient ground for the suspension or dismissal of the official or
employee concerned.

Effectivity of Ordinances
a. Unless otherwise stated in the ordinance, it shall take effect
after 10 days from posting at the provincial capitol or city, municipal or
barangay hall and two other conspicuous places.
b. The gist of all ordinances with penal sanction shall be
published in a newspaper of general circulation in the province. In the
absence of such newspaper, the ordinance shall be posted in all
municipalities and cities of the province where the sanggunian of origin is
situated.
c. In highly urbanized and independent component cities, in
addition to posting, the main features of the ordinance shall be published in
a local newspaper of general circulation. In the absence of such newspaper,
it shall be published in any newspaper of general circulation.
Enforcement of Local Ordinances
The Local Government Code imposes upon the city mayor the duty to enforce all
laws and ordinances relative to the governance of the city. As the chief executive
of the city, he has the duty to enforce ordinances as long as they have not been
repealed by the Sanggunian or annulled by the courts. He has no other choice. It is
his ministerial duty to do so. (Social Justice Society vs. Atienza, 517 SCRA 657)
In City Engineer of Baguio vs. Baniqued, GR 150270, November 26, 2008,
it was held that the issuance of notice of demolition by the City Mayor is never a
judicial, ministerial or rule-making function. It is strictly an act of law enforcement
and implementation.

II. Corporate Powers Section 22, LGC


Local government units shall enjoy full autonomy in the exercise of their
proprietary functions and in the management of their economic enterprises, subject
to limitations provided in the Local Government Code and other applicable laws.
The corporate powers of local government units are:
POWERS OF LOCAL GOVERNMENT UNITS /58
(1) To have continuous succession in its corporate name.
(2) To sue and be sued.
a. Who Initiates Suit. The rule is that a suit is commenced by the local
chief executive. In City of Caloocan vs. CA, 489 SCRA 45, it was
held that the mayor has the authority to file suits for the recovery of
funds and property on behalf of the city even without prior
authorization from the sanggunian. This conclusion is strengthened
by the fact that nowhere in the enumerated powers and duties of the
sanggunian can one find the requirement of such prior authorization
in favor of the mayor for the purpose of filing suits on behalf of the
city
b. Who Represents the Unit. The local government unit must be
represented by the Legal Officer or the Provincial Prosecutor and
not by a private lawyer. (Municipality of Pililla, Rizal vs. CA, 233
SCRA 484) The rational of the prohibition is to relieve the LGU of
the burden of hiring a private attorney. Likewise, the interest of the
municipality would be best protected if a government lawyer
handles its litigations. It is also expected that the municipal attorney
and fiscal would be faithful and dedicated to the LGUs interests.
Furthermore, civil service employees, such as a government lawyer
could be held accountable for any misconduct or dereliction of duty.
(Province of Cebu vs. IAC, 147 SCRA 447).
c. The legality of the representation of an unauthorized counsel may be
raised at any stage of the proceedings. The fact that the fiscal would
collaborate with private counsel does not legalize his representation
of the municipality. However, the Municipal Attorney may validly
adopt the work already performed in good faith by a private lawyer,
provided that no injustice is committed against the adverse party and
that no compensation has been paid to the private counsel. (Ramos
vs. CA, 269 SCRA 34)
c. By way of exception, local government units may be represented by
a private attorney only:
(1) when the provincial fiscal is disqualified from representing
the municipality. (Province of Cebu vs. IAC, 147 SCRA 447)
(2) when the jurisdiction of a case involving the municipality
lies with t he Supreme Court Mancenido vs. CA, 330
SCRA 419)
(3) when the municipality is a party adverse to the provincial
government or to some other municipality in the same
province (Id.)
POWERS OF LOCAL GOVERNMENT UNITS /59
(4) when in a case involving the municipality, the provincial
prosecutor, his spouse, or his child is involved as a creditor,
heir, legatee, or otherwise. (Id.)

d. In resolving whether a local government official may secure the


services of private counsel in an action filed against him in his
official capacity, the nature of the action and the relief sought are to
be considered, as where the complaint contained other allegations
and prayer for moral damages, which, if due from the defendants,
must be satisfied by them in their private capacity. (Id.)

e. A trial court cannot issue a writ of execution ordering a municipality


to pay damages because public funds are not subject to levy. They
are held in trust for the accomplishment of the purposes for which
municipal corporations are created. (Municipality of Makati vs. CA,
190 SCRA 206)

f. Where an ordinance has already been enacted appropriating money


for payment under a construction contract, garnishment should not
be quashed. (Pasay City Government vs. CFI, 132 SCRA 156)

(3) To have and use a corporate seal.


Local government units may continue using, modify or change their
corporate seal; any change shall be registered with the Department of
Interior and Local Government.

(4) To acquire and convey real or personal property


a. LGUs may acquire real or personal, tangible or intangible property,
in any manner allowed by law such as sale, donation etc.
b. A local government unit may alienate only patrimonial property
upon proper authority. The Revised Administrative Code requires
the approval of the President for the conveyance of title to real
property. If such approval was not obtained, the conveyance was
void. (City of Naga vs. CA, 172 SCRA 13)
c. Public streets, thoroughfares and town plazas are properties of public
dominion, outside the commerce of man, and may not be subject to
lease or other contracts, and cannot be disposed of to private
persons. (Macasiano vs. Diokno, 212 SCRA 464)

d. PD 957, as amended by PD 1216, mandates that open spaces in a


subdivision shall be donated to the local government unit where

POWERS OF LOCAL GOVERNMENT UNITS /60


the subdivision is located. The decree does not prohibit the
imposition of conditions on the donation provided that the same are
not contrary to law, morals, good custom, public order or policy,
although it prohibits any construction to be made on the minimum
area required for an open space in a subdivision. Considering that
the area donated is less than the area required to be allocated for an
open space, there is no excess area on which to construct the sports
complex demanded by the subdivision owner as a condition for the
donation. Thus, the condition for the donation is contrary to law and
should be deemed not imposed. But the donation cannot be revoked
for failure to comply with the condition. Otherwise, the subdivision
owner would be able to evade its obligation to donate the open
space. (City of Angeles vs. CA, 261 SCRA 90)
e. The reconveyance of property of public domain is subject to strict
legal requirements, foremost among the requirements being that the
public property sought to be reconveyed be alienable. (Figuracion
vs. Libi, 539 SCRA 50)

(5) Power to enter into contracts


Requisites of a valid municipal contract:
i) The local government unit has the express or implied power to
enter into the particular contract.
ii) The contract is entered into by the local chief executive on behalf of
the local government unit with prior authorization by the sanggunian
concerned.
There is nothing in the powers and functions of the city
treasurer that gives the city treasurer authority to sign contracts for
the city government. (Mallari vs. Alsol, 484 SCRA 148)
iii) The contract must comply with certain substantive requirements,
i.e., when expenditure of public funds is to be made, there must be
an actual appropriation by the Sanggunian and a certificate of
availability of funds by the local treasurer.
Where the cost of a construction contract was beyond the
appropriated amount as certified by the city treasurer, the contract
was void from the very beginning. (Osmena vs. COA, 230 SCRA
585)
iv) The contract must comply with the formal requirements of written
contract, e.g., Statute of Frauds.

POWERS OF LOCAL GOVERNMENT UNITS /61

Ultra viries contracts


When a contract is entered into without compliance with the
first and third requisites (above), the same is ultra viries and is null
and void. Such contract cannot be ratified or validated. Ratification
of defective municipal contracts is possible only when there is non-
compliance with the second and/or the fourth requirements above.
Ratification may either be express or implied.

Authority to negotiate and secure grants


The local chief executive, may upon authority of the
sanggunian, negotiate and secure financial grants or donations in
kind, in support of the basic services and facilities enumerated in
Section 17 of the LGC, from local and foreign assistance agencies
without necessity of securing clearance or approval from any
department, agency, or office of the national government or from
any higher local government unit; Provided, that projects financed
by such grants or assistance with national security implications shall
be approved by the national agency concerned.

(6) To exercise such other powers as are granted to corporations, subject


to the limitations provided in the Code and other laws.

--o0o--

VI. MUNICIPAL LIABILITY


General Rule: Local government units and their officials are not exempt from
liability for death or injury to persons or damage to property. (Sec. 24, LGC)
1. Specific provisions of the Civil Code making LGUs liable:
a). Art. 2189 : The local government unit is liable in damages or
injuries suffered by reason of the defective condition of roads,
streets, bridges, public buildings and other public works.

The City of Manila was held liable for damages when a


person fell into an open manhole in the streets of the city. City of
Manila vs. Teotico, 22 SCRA 267)
Despite a management and operating contract with Asiatic
Corporation over the Sta. Ana Public Market, the City of Manila is
still solidarily liable fort injuries sustained by an individual who
stepped on rusted nail while the market was flooded. (Jimenez vs.
City of Manila, 150 SCRA 510)
The liability of the city for injuries due to defective roads
attaches even if the road does not belong to the local government
unit, as long as the City exercises control or supervision over said
road. (Guilatco vs. City of Dagupan, 171 SCRA 382 and
Municipality of San Juan, MetroManila vs. CA, 466 SCRA 78))
b) Art. 2180, par. 6: The State is responsible when it acts through a
special agent. (Merritt vs. Government of the Philippines, 34 Phil
311)
c) Art. 34: The local government unit is subsidiarily liable for damages
suffered by a person by reason of the failure or refusal of a member
of the police force to render aid and protection in case of danger to
life and property.
2. Liability for Tort: Under Sec. 24 of RA 7160, local government units
and their officials are not exempt from liability for death or injury to
persons or damage to property.

a) If local government is engaged in governmental functions, it is not


liable.

In Municipality of San Fernando vs. Firme, 195 SCRA 692,


it was held that the municipality cannot be held liable for torts
committed by a regular employee, even if the dump truck used
belonged to the municipality, inasmuch as the employee was
discharging government functions, i.e., road construction. This
ruling was reiterated in Jayme vs. Apostol, GR 165060, November
27, 2008, where it upheld the trial courts ruling that the
municipality of Koronadal, the true and lawful employer of Lozano
may not be sued because it is an agency of the State engaged in
governmental functions and , hence, immune from suit.
62

MUNICIPAL LIABILITY /63


b) If engaged in proprietary functions, local government unit is liable.
In Torio vs. Fontanilla 85 SCRA 599, The Municipality of
Malasiqui was held liable for the death of a member of the zarzuela
group when the staged collapsed, under the principle of respondeat
superior. The holding of a town fiesta managed by the Municipal
Council is a proprietary function.

In City of Manila vs. IAC, 179 SCRA 428) the North


Cemetery is a property which the City of Manila owns in its
proprietary capacity. The maintenance of the cemetery is a
proprietary function. Hence, for breach of contract, the City of
Manila is liable for damages. The City of Manila is liable for
tortuous act committed by its agents who failed to verify the
duration of the contract of lease.
c) Personal liability of local officials.
Where public officers act maliciously and wantonly and
injure individuals rather than discharge a public duty, they are
personally liable. Thus, the Provincial Governor and the members of
the Provincial Board were held liable for damages in their personal
capacity arising form the illegal act of dismissing employees in bad
faith. (Rama vs. CA, 148 SCRA 496)
3. Liability for violation of Law

The Municipality of Bunawan, Agusan del Sur, through the Mayor,


was held in contempt and fined P1,000.00 with a warning, because of the
refusal to abide by a Temporary Restraining Order issued by the Court.
(Moday vs. CA, 243 SCRA 152)
But, no liability, whether criminal or administrative, may be
imputed to a mayor who, in entering into a contract, merely complied with
the mandate of resolutions passed by the Sangguniang Bayan. (Constantino
vs. Desierto, 288 SCRA 654))
4. Liability for Contracts

General Rule: A municipal corporation is liable on a contract it


enters into provided the contract is intra viries. If the contract is ultra viries,
the local government unit is not liable.
Doctrine of Implied Municipal Liability. A municipality may
become obligated upon an implied contract to pay the reasonable value of
the benefits accepted or appropriated by it as to which it has the general
power to contract. Thus, in Province of Cebu vs. IAC, 147 SCRA 447, it was
held that the Province of Cebu cannot set up the plea that the contract was
ultra viries and still retain benefits thereunder. Having regarded the contract
as valid for purposes of reaping benefits, the local government unit is
estopped to question its validity for the purpose of denying answerability.

VII. LOCAL OFFICIALS


Qualifications prescribed by law are continuing requirements and must be
possessed for the duration of the officers active tenure. Once any of the required
qualifications is lost, his title to the office may be seasonably challenged. Loss of
any of the qualifications during incumbency will be a ground for disqualification
and termination. (Frivaldo vs. COMELEC, 174 SCRA 245 and Labo vs.
COMELEC, 176 SCRA 1)
Common Qualifications For Local Elective Officials
Filipino citizen either natural born or naturalized
For local elective officials the Local Government Code requires that
they must be citizens of the Philippines either natural born or naturalized.
The law, however, is silent as to when must the required citizenship be
possessed by a candidate.
Repatriation. In Altarejos vs. COMELEC, 441 SCRA 655, the
Supreme Courts reiterated its ruling in Frivaldo, 257 SCRA 727, that
repatriation under PD 725 retroacts to the date of filing of ones application
for repatriation. Accordingly, petitioners repatriation under RA 8171,
which repealed PD 725, retroacted to the date he filed his application in
1997 and was, therefore, qualified to run for mayoralty position in the
government in May 2004 elections.
Section 5, Par. 2 of RA 9225 Citizenship Retention and
Reacquisition Act of 2003 provides that those seeking elective public office
shall meet the qualifications required by the Constitution and existing laws
and, at the time of filing of certificate of candidacy, make a personal and
sworn renunciation of any and all foreign citizenship before any public
officer authorized to administer oath.

Mere filing of certificate of candidacy cannot operate as an effective


renunciation of foreign citizenship. The law mandates that a candidate with
dual citizenship must make a personal and sworn statement of any and all
foreign citizenship before any public officer authorized to administer oath.
Absent an evidence that will show that Lopez complied with the provision
of RA 9225, he is disqualified to run for Barangay Chairman of Barangay
Bagacay. For the renunciation to be valid, it must be contained in an
affidavit duly executed before an officer of law who is authorized to
administer an oath. The affiant-candidate must state in clear and
unequivocal terms that he is renouncing all foreign citizenship for it to be
effective. For failure to prove that he abandoned his allegiance to the United
States, he is disqualified to from running for an elective position in the
Philippines.(Lopez vs. COMELEC, GR No.182701, July 23, 2008)
An oath of Allegiance to the Republic of the Philippines made by a
candidate before the Los Angeles Philippine Consul General does not
64
LOCAL OFFICIALS /65

substantially comply with the requirement of a personal and sworn


renunciation of foreign citizenship because these are distinct requirements
to be complied with for different purposes. The oath of allegiance is a
requirement in reacquisition of Philippine citizenship by natural born-
citizens who are already naturalized citizens of a foreign country as required
by Section 3 of RA 9225, further there is nothing in the said oath that
expressly makes a renunciation of the foreign citizenship. Section 5(2) of
RA 9225 categorically requires persons seeking elective public office who
either retained their Philippine citizenship before a public officer authorized
to administer an oath simultaneous with or before filing of the certificate of
candidacy. Similarly the certificate of candidacy merely provides for an
oath of allegiance but there is no express renunciation of foreign citizenship.
The same oath of allegiance in the certificate of candidacy is merely a
general requirement for all those who wish to run as candidates in
Philippine elections, while the renunciation of foreign citizenship is an
additional requisite only for those who have retained or reacquired
Philippine citizenship under R 9225 who seek elective posts, considering
their special circumstance of having more than one citizenship. (Jacot vs.
Dal, GR No. 179848, November 27, 2008)

ii. Residence therein for at least one year immediately


before the election
The term residence as used in the election law, imports not only
an intention to reside in a fixed place but also personal presence in that
place, coupled with conduct indicative of such intention. Domicile
denotes a fixed permanent residence to which when absent for business or
pleasure, or for like reasons, one intends to return. (Papandayan, Jr. vs.
COMELEC, 382 SCRA 133)
The term residence is to be understood not in its common
acceptation as referring to dwelling or habitation, but rather to
domicile or legal residence, that is, the place where a party actually or
constructively has his permanent home, where he, no matter where he may
be found at a given time, eventually intends to return and remains (animus
manendi) A domicile of origin is acquired by every person at birth. It is
usually the place where the childs parents reside until the same is
abandoned by acquisition of new domicile (domicile of origin). (Coquilla
vs. COMELEC, 385 SCRA 607)
The rationale of requiring candidates to have a minimum period of
residence in the area in which they seek to be elected is to prevent the
possibility of a stranger or newcomer unacquainted with the conditions and
needs of a community and not identified with the latter from seeking an
elective office to serve that community. (Torayno vs. COMELEC, 337
SCRA 574)

LOCAL OFFICIALS /66

The residence requirement is rooted in the desire that officials of


districts or localities be acquainted not only with the metes and bounds of
their constituencies but, more important, with the constituents themselves,
and a very legalistic, academic and technical approach to the resident
requirement does not satisfy this simple, practical and common sense
rationale for the residence requirement. (Ibid.)
Hence, in Torayno, the Supreme Court upheld the residency
qualification of Governor Emano, inasmuch as he has proven that he,
together with his family had actually resided in a house he bought in 1973
in Cagayan de Oro City; had actually held office there during his three
terms as provincial governor of Misamis Oriental, the provincial capitol
being located therein; and had registered as voter in the city during the
period required by law he could not be deemed a stranger or
newcomer when he ran and was voted as city mayor. Petitioners
put much emphasis on the fact that Cagayan de Oro City is a highly
urbanized city whose voters cannot participate in the provincial elections.
Such political subdivisions and voting restrictions, however, are simply for
the purpose of parity representation. The classification of an area as a highly
urbanized or independent component city, for that matter, does not
completely isolate its residents, politics, commerce and other businesses
from the entire province, and vice versa; especially when the city is located
at the very heart of the province itself. (Ibid.)
Repatriation and Residency. In Coquilla vs. COMELEC, 385
SCRA 607, it was held that once a Filipino loses his citizenship or becomes
a citizen of another country, he also loses his domicile of origin or residence
in the Philippines. Should he reacquire his citizenship, it would carry with it
the reacquisition of his residency in the Philippines. However, the period of
his reacquired residency shall be counted from the date he reacquired his
Philippine citizenship or actually took his oath of allegiance as a repatriated
Filipino citizen.
Property Ownership and Residency. In Dumpit-Michelena vs.
Boado, 475 SCRA 290, the Supreme Court ruled that property ownership in
not indicia of the right to vote or be voted for an office. A beach house is at
most a place of temporary relaxation. It can hardly be considered a place of
residence. Further, domicile is not easily lost. To successfully
effect a change of domicile, there must be concurrence of the following
requirements: (1) an actual removal or an actual change of domicile; (2) a
bona fide intention of abandoning the former place of residence and
establishing a new one; and (3) acts which corresponds with the purpose.
Without clear and positive proofs of the concurrence of those 3
requirements, the domicile of origin continues. To effect change, there must
be animus manendi coupled with animus revertendi. The intent to remain in
the new domicile of choice must be for indefinite period of time,

LOCAL OFFICIALS /67

the change of residence must be voluntary, and the residence at the place
chosen for the new domicile must be actual. The Supreme Court agreed
with the Second Division of the COMELEC that Dumpit-Michelena failed
to establish that she has abandoned her former domicile.
iii. Ability to read and write Filipino or any other local dialect
iv. Registered voter of the local government unit, or of
the district where he intends to be elected in the case of the members of the
sanggunian
Age Qualification
a) Candidates in provinces and highly urbanized cities at least
23 years old
b) Candidates for mayor and vice mayor of component cities or
municipalities at least 21 years old
c) Candidates for Sanggunian member in component cities and
municipalities at least 18 years old
d) Barangay officials at least 18 years old
e) Sanggunian Kabataan at least 15 to 17 years old
The required age qualification must be possessed by any candidate,
national or local, on the day of election.

Disqualifications Under the Local Government Code Sec. 40


a. Those sentenced by final judgment for an offense involving moral
turpitude or an offense punishable by imprisonment for at least one year,
within two years after service of sentence.
Moral turpitude is an act of baseness, vileness, or depravity in the
private duties which a man owes his fellowmen, or to society in general,
contrary to accepted and customary right and duty between man and woman
or conduct contrary to justice, honesty, modesty or good faith. In Dela
Torre vs. COMELEC, 258 SCRA 483, it was held that violation of the Anti-
Fencing Law involves moral turpitude. In Moreno vs. COMELEC, GR No.
168550, August 10, 2006, the Supreme Court ruled that those who have not
served their sentence by reason of the grant of probation are not disqualified
from running for local elective office because the two year period of
ineligibility does not even begin to run. The grant of probation merely
suspends the execution of the sentence.
The Supreme Court made no pronouncement in Lim vs. People, 340
SCRA 497 which reiterated the ruling in Vaca vs. CA, 298 SCRA 565, that
with the deletion of the prison sentence for violation of BP 22, the offense
no longer involves moral turpitude.
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In People vs. Tuanda, 181 SCRA 692, the Supreme Court did not
make a distinction whether the offender is a lawyer or a non-lawyer, nor did
it declare that such offense constitutes moral turpitude when committed by a
member of the Bar but not so when committed by a non-member. (Villaber
vs. COMELEC, 369 SCRA 126)
Direct bribery is a crime involving moral turpitude. The Local
Government Code is a codified set of laws that specifically applies to local
government units. Section 40 thereof specifically and definitely provides for
disqualifications of candidates for elective local positions. It is applicable to
them only. On the other hand, Section 12 of the Omnibus Election Code
speaks of disqualifications of candidates for any public office. It deals with
the election of all public officers. Thus, Section 40 of the Local Government
Code insofar as it governs the disqualifications of candidates for local
positions, assumes the nature of a special law which ought to prevail.
(Magno vs. COMELEC 390 SCRA 495)
b. Those removed from office as a result of an administrative case.
An elective local official who was removed from office prior to
January 1, 1992 is not disqualified from running for elective local office.
(Grego vs. COMELEC, 274 SCRA 481)
c. Those convicted by final judgment for violating his oath of allegiance to the
Republic.
d. Those with dual citizenship.
The phrase dual citizenship in RA 7160, Sec. 40(d) and RA 7854,
Sec. 20 must be understood as referring to dual allegiance. Consequently,
persons with mere dual citizenship do not fall under this disqualification.
For candidates with dual citizenship, it should suffice if, upon the filing of
their certificates of candidacy, they elect Philippine citizenship to terminate
their status as persons with dual citizenship considering that their condition
is the unavoidable consequence of conflicting laws of different states.
(Mercado vs. Manzano, 307 SCRA 630)
However, if dual citizenship is acquired voluntarily pursuant to RA
9225, The Dual Citizenship Law, the same can be a ground for
disqualification to the right of suffrage.
e. Fugitives from justice in criminal or non-political cases.
The term includes not only those who flee after conviction to avoid
punishment, but likewise who, after being charged, flee to avoid
prosecution. (Marquez vs. COMELEC, 243 SCRA 538)

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f. Permanent residents in foreign country or those who have the right to reside
abroad and continue to avail of it.
A Filipino citizens immigration to a foreign country constitutes an
abandonment of his domicile and residence in the Philippines. In other
words, the acquisition of a permanent residency status is a foreign country
constitutes a renunciation of the status as a resident of the Philippines.
(Caasi vs. CA, 191 SCRA 229)
The act of a person surrendering her greencard to the Immigration
and Naturalization Service of the US Embassy is clear indication of her
intention to abandon her US residency. (Gayo vs. Verceles, 452 SCRA 504)
When the evidence of the alleged lack of residence qualification is
weak or inconclusive and it clearly appears that the purpose of the law
would not be thwarted by upholding the right to the office, the will of the
electorate should be respected. In this case, considering the purpose of the
residency requirement, i.e., to ensure that the person elected is familiar with
the needs and problems of his constituency, there can be no doubt that
private respondent is qualified. (Gayo vs. Verceles, citing Perez)
g. The insane or feeble-minded.
Date of Election
Unless otherwise provided by law, the elections for local officials, except
for barangay officials, shall be held every three (3) years on the second Monday of
May.
Manner of Election
a. The governor, vice governor, mayor, vice mayor, and
punong barangay shall be elected at large in their respective units by
qualified voters therein. Sangguniang Kabataan chairman for each barangay
shall be elected by the registered voters of the katipunan ng barangay. (Sec.
41.)
b. For provinces and cities with two or more legislative
districts, the elective member of the sanggunian shall be elected by
legislative districts. Provinces, cities and municipalities in Metropolitan
Manila with only one legislative district shall be divided into two districts
by the COMELEC. [Sec. 3 (a) and (b), RA 7166; Sec. 1, RA 7887]
c. Regular elective members of the Sanggunian of cities and
municipalities shall be elected at large. (Sec. 1, RA 7887)
d. Sangguniang barangay members shall be elected at large.
e. The president of the league of sanggunian members of
component cities and municipalities shall be ex officio member of the
sangguniang panlalawigan.

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f. The president of the liga ng mga barangay and the


pederasyon ng mga sangguniang kabataan shall be ex officio member of the
sanggunian.
g. There shall be a sectoral representative from the women,
workers, urban poor, indigenous cultural communities, disabled persons, or
any other sector determined by the sanggunian. (Sec. 41)

Term of Office
The term of office of elective local officials, except barangay officials,
which shall be determined by law, shall be three years and no such official shall
serve for more than three consecutive terms. Voluntary renunciation of the office
for any length of time shall not be considered as an interruption in the continuity of
his service for the full term for which he was elected. (Section 8, Art. X, PC)
Under Section 2 of RA 9164. the term of office all barangay and
sangguniang kabataan officials shall be three years. The counting of the three
consecutive terms shall be reckoned from the 1994 barangay elections. Thus,
Laceda who has served as Punong Barangay of Panlayaan for three consecutive
terms, was disqualified from running for the fourth time as punong barangay.
(Laceda, Sr. vs. Limena, GR 182867, November 25, 2008) In this case, while it is
true that under RA 8806, the municipalities of Sorsogon and Bacon were merged
and converted into a city thereby abolishing the former and creating Sorsogon City
as new political unit, it cannot be said that for the purpose of applying the
prohibition in Section 2 of RA 9164, the Office of the Punong barangay of
Barangay Panlayaan, Municipality of Sorsogon, would now be construed as a
different local government post as that of the office of Punong Barangay of
Barangay Panlayaan, Sorsogon City, is the same as before conversion.
Consequently, the inhabitants of the barangay are the same. They are the same
group of voters who elected Laceda to be their Punong barangay for three
consecutive terms and over whom Laceda held power and authority as their Punong
Barangay. Moreover, RA 8806 did not interrupt Lacedas term.

Three consecutive term limit

Rationale. The three-term limit is an exception to the peoples freedom to


choose those who will govern them in order to avoid the evil of a single person
accumulating excessive power over a particular territorial jurisdiction as a result of
a prolonged stay in the same office. (Latasa vs. COMELEC, 417 SCRA 574) It is
primarily intended to broaden the choices of the electorate of the candidates who
will run for office, and to infuse new blood in the political arena by disqualifying
officials from running for the same office after a term of nine years. (Laceda, Sr
vs.Limena, supra)

LOCAL OFFICIALS /71

Requisites
For the prohibition or disqualification to apply, two requisites must concur:
(1) the official concerned has been elected for three consecutive terms in the same
local government post and (2) that he has fully served three consecutive terms.
(Borja vs. COMELEC, 295 SCRA 157; See also Latasa vs. COMELEC, 417 SCRA
574; Ong vs. Alegre, 479 SCRA 473 and Laceda Sr. vs. Limena, supra)

Assumption by Succession. The term limit for elective local officials must
be taken to refer to the right to be elected as well as the right to serve in the same
elective position. Consequently, it is not enough that an individual has served three
consecutive in an elective local office, he must also have been elected to the same
position for the same number of times before the disqualification can apply. (Borja
vs. COMELEC, 295 SCRA 157 reiterated in Adormeo vs. COMELEC GR
No.147927, February 4, 2002)

Involuntary Severance from Office. Voluntary renunciation of a term of


office does not cancel the renounced term in the computation of the three term
limit; conversely, involuntary severance from the office for any length of time
short of the full term provided by law amounts to an interruption of continuity of
service. Thus, in Lonzanida vs. COMELEC, 311 SACRA 602, thought proclaimed
as winner by the Board of Canvassers, he is not considered duly elected for that
particular term because he was unseated when there was a declaration of failure of
election and his proclamation was a nullified. Also, he did not fully serve the term,
hence, he was qualified to run for a third term.

But in Ong vs. Alegre, 479 SCRA 473, the Supreme Court held that Ongs
assumption as mayor of San Vicente, Camarines Sur from July 1, 1998 to June 30,
2001, constitutes service of full term and should be counted as full term
served in contemplation of the three term limit prescribed by the Constitution
While Ongs opponent won in an election protest in the 1998 mayoralty race, and
therefore was the legally elected mayor, that disposition was without practical
and legal use and values, having been promulgated after the term of the contested
office has expired. Ongs contention that he was only a presumptive winner in the
1998 mayoralty derby as his proclamation was under protest did not make him less
than a duly elected mayor. His proclamation by the Municipal Board of
Canvassers as duly elected mayor in 1998 mayoralty election coupled by his
assumption of office and his continuous exercise of the functions thereof from the
start to finish of the term, should be legally be taken as service for a full term in
contemplation of the three-term rule. This case equally applies to Morales because
he was the mayor of Mabalacat, Pampanga continuously for the entire period
without any break notwithstanding the decision in the electoral protest case ousting
him as mayor. Such circumstance does not constitute an interruption in serving the
full term, hence he is disqualified. (Rivera III vs. COMELEC, GR No. 167591, May
6, 2007)
LOCAL OFFICIALS /72
SFP was elected and served three consecutive term as municipal councilor.
During his second term, he succeeded as vice-mayor due to the retirement of the
incumbent vice-mayor. His assumption as vice-mayor was considered an
involuntary severance from his office as municipal councilor resulting an
interruption in his second term of service. It was held that it could not be deemed to
have been by reason of voluntary renunciation because it was by operation of law,
hence qualified to run again as municipal councilor. (Montebon vs. COMELEC,
551 SCRA 50)

Voluntary Severance from Office. Punong Barangay who had already


completed two consecutive terms of office and ran for a third term in the Barangay
elections of 2002, and while serving his third term as Punong Barangay, he
subsequently ran and won and assumed the position of a Sangguniang Bayan
member, has effectively abandoned the position of a Punong Barangay and he
intended to forego of it. Abandonment, like resignation, is voluntary. When he
voluntarily relinquished his office as a Punong Barangay, there is voluntary
renunciation of said office. Such circumstance does not constitute an interruption in
serving the full term, hence he is disqualified. (Bolos vs. COMELEC, GR No.
184082, March 17, 2009)

Conversion of a Municipality to a New Component City. While a new


component city which was converted from a municipality acquires a new corporate
existence separate and distinct from that of the municipality, this does not mean
however, that for the purpose of applying the constitutional provision on term
limits, the office of the municipal mayor would now be construed as a different
local government post as that of the office of the city mayor. Accordingly, the
municipal mayor is barred from running for city mayor under the three-term limit
rule. (Latasa vs. COMELEC, 417 SCRA 574) This prohibition also applies to the
office of a punong barangay of a municipality merged with another municipality to
create a city as a new political unit. The territorial jurisdiction of such barangay is
the same as before conversion and the inhabitants of the barangay are the same.
The voters who voted for the punong barangay are the same group of voters. The
prohibition applies to prevent him from running as punong barangay for the fourth
time, there being no break in the continuity of the terms. (Laceda vs. Limena, GR
No. 182867. November25, 2008)
Eligibility in a Recall Election. Section 43 of RA 7160 provides that no
local elective official shall serve for more than three (3) consecutive terms in the
same position. Voluntary renunciation of the office for any length of time shall not
be considered as an interruption in the continuity of service for the full term for
which the elective official was elected. After three consecutive terms, an elective
local official cannot seek immediate reelection for a fourth term. The prohibited
election refers to the next regular election for the same office following the end of
the third consecutive term. Any subsequent election, like a recall

LOCAL OFFICIALS /73

election, is no longer covered by the prohibition for two reasons. First, a subsequent
election is no longer an immediate reelection after three consecutive terms. Second,
the intervening period constitutes an involuntary interruption in the continuity of
service. (Socrates vs. COMELEC, 2002, 391 SCRA 457)
A necessary consequence of the interruption of service is the start of a new
term following the interruption. An official elected in recall election serves the
unexpired term of the recalled official. This unexpired term is in itself one
term for purposes of counting the three-term limit. A local official who serves a
recall term should know that the recall term is in itself one term although less than
three years. This is the inherent limitation he takes by running and winning in the
recall election. (Ibid.)

Vacancies and Succession


I. Permanent Vacancy
1. Governor and Mayor
a. Vice Governor and Vice Mayor
b. Sanggunian members according to ranking
2. Punong barangay
a. Highest ranking sangguniang member
b. Second Highest ranking sangguniang barangay member
3. Ranking in the sanggunian shall be determined on the basis of the
proportion of the votes obtained to the number of registered voters in each
district, and not merely on the number of voters who actually voted.
(Victoria vs. COMELEC, 229 SCRA 269).
4. Ties will be resolved by drawing of lots. (Sec.44)
5. Sanggunian
a. Provinces, highly urbanized cities and independent
component cities appointment by the President
b. Component city and municipality appointment by
governor
c. Under paragraph (a) of Section 45 of the Local Government
Code, it is the Provincial Governor who fills any permanent vacancy
in the Sangguniang Bayan by appointment. (Farinas vs. Barba, 256
SCRA 396))
The last vacancy in the Sanggunian refers to that created
by the elevation of the members formerly occupying the next higher
rank which in turn also had become vacant by any of the causes
enumerated, and the term last vacancy is thus used in Section
45(b) of the Local Government Code, to differentiate it from the
other vacancy previously created. In Navarro vs. CA, 355 SCRA
672, with the elevation of Tamayo who belonged to

LOCAL OFFICIALS /74

Reforma Party, to the position of Vice-Mayor, a vacancy occurred in


the Sanggunian that should be filled up with someone who belongs
to the political party of Tamayo. To argue that the vacancy created
was that formerly held by the 8th Sanggunian member, a Lakas Party
Member, would result in the increase in that partys representation
in the Sanggunian at the expense of Reforma Party.
Thus, the appointment of Navarro to fill up the vacancy in
the Sanggunian is valid. The reason behind the right given to a
political party to nominate a replacement where a permanent
vacancy occurs in the Sanggunian is to maintain party representation
as willed by the people in the election. Otherwise, Reforma Partys
representation in the Sanggunian would be diminished.
d. Sangguniang barangay appointment by mayor
e. Except for the sangguniang barangay, the appointee shall
come from the political party of the member who caused the
vacancy. (Farinas vs. Barba, 256 SCRA 396))
f. If the member does not belong to any party, the appointee
shall be recommended by the sanggunian. (Ibid.)
Neither petitioner nor respondent is entitled to the vacant
seat in the Sangguniang Bayan. While petitioner was appointed by
the provincial governor, he was not recommended by the
Sangguniang Bayan. Such recommendation is a condition sine qua
non for the validity of the appointment. Although respondent was
recommended by the Sangguniang Bayan, it was the municipal
mayor and not the provincial governor who appointed him. (Ibid.)
g. The appointee for the sangguniang barangay shall be
recommended by the sangguniang barangay.
h. Vacancy in the representation of the youth and the barangay
in the sanggunian shall be filled by the official next in rank of the
organization. (Sec. 45)

II. Temporary vacancy


1. When the governor, mayor or punong barangay is temporarily incapacitated
to perform his duties, the vice governor, vice mayor, or ranking
sangguniang barangay member shall exercise his powers except the power
to appoint, suspend or dismiss employees, which can only be exercised after
30 working days.

LOCAL OFFICIALS /75


Since the Local Government Code is silent on the mode of
succession in case of temporary vacancy in the position of vice governor,
because of the exigencies of public service, the President, through her alter
ego, the Secretary of Local Government, may extend a temporary
appointment to remedy the situation. The President is authorized by law to
make temporary appointments to vacant appointive positions. In the absence
of a contrary provision, there is no reason why this cannot be applied to this
case. The appointment of petitioner is in accordance with
the intention of the LGC, which provides that in case of permanent
vacancy in the office of the vice governor, the member of the Sangguniang
Panlalawigan who obtained the highest number of votes shall assume office.
The contention the its the SP who should make the appointment has no
merit. As between the President, who has supervision over local
governments, and the members of the SP, who are junior to the vice
governor, the former should prevail. Even if the President has no power to
appoint petitioner, at the very least he is a de facto officer and is entitled to
compensation. (Menzon vs. Petilla, 197 SCRA 251)
2. When the local chief executive is traveling within the Philippines for not
more than 3 consecutive days, he may designate an officer-in-charge. The
authorization shall specify the powers of the officer-in-charge except the
power to appoint, suspend or dismiss employees.
3. If the local chief executive does not issue the authorization, the vice
governor, vice mayor, or highest ranking sangguniang barangay member
shall assume his powers on the fourth day of his absence. (Sec. 46)

Powers of Vice Governor


In Atienza vs. Villarosa, 458 SCRA 385, it was held that the Vice Governor,
as presiding officer of the Sangguniang Panlalawigan, has administrative control of
the funds of the said body and it is he who has the authority to approve
disbursement vouchers for expenditures appropriated for the operation of the
Sangguniang Panlalawigan. The power of the Vice Governor to
approve disbursement vouchers necessarily includes the authority to approve
purchase orders covering the same applying the doctrine of necessary implication.
In the same case, the Supreme Court also ruled that the Provincial Governor has no
authority to appoint officials and employees of the Sangguniang Panlalawigan. The
union of executive and legislative has been disbanded under the Local Government
Code.
Compensation
The compensation of local officials and personnel shall be determined by
the Sanggunian concerned and may be based upon the pertinent provisions of RA
6758. Increase in compensation of elective local officials shall take effect after
expiration of the term of those approving the increase. Elective officials shall be
entitled to the same leave privileges as those enjoyed by appointive local officials,
including the cumulation and commutation thereof. (Sec. 81)
LOCAL OFFICIALS /76
Recall
Initiation. RA 9244 effectively amended Section 70 of the LGC and thus,
eliminated the preparatory recall assembly as one of the modes of initiating recall
and provided a new procedure in the conduct of recall initiated through the written
petition of registered voters according to the following schedule:
-25% - where the voting population of LGU does not exceed 20,000;
-at least 20% but not less than 5,000 - for LGUs with at least 20,000 but
not more than 75,000 voting population;
-at least 15% but not less than 15,000 for LGUs with at least 75,00 but not
more than 300,000 voting population; AND
-at least 10% but not less than 45,000 for LGUs with over 300,000 voting
population.
In Angobung vs. Paras, 269 SCRA 245, it was held that only a petition
signed and filed by at least 25% of the total number of registered voter, and not
only by the respondent, may validly initiate recall proceedings.
Recall Election. The official sought to be recalled is automatically a
candidate. (Sec. 71)
Effectivity of Recall. Recall shall be effective upon the election and
proclamation of successor receiving the highest number of votes. (Sec. 72)
Prohibition against resignation. The official sought to be recalled cannot
resign while the recall process is in progress. (Sec. 73)
Limitations. An official may be subject of recall only once during his term.
No recall shall take place within one year from assumption of office or one year
before the regular local election. (Sec. 74) The phrase regular election should be
construed as referring to an election where the office held by the local elective
official sought to be recalled will be contested. (Paras vs. COMELEC, 264 SCRA
49)
Another limitation is the prohibition to conduct recall election within one
year from the date of assumption of office of the official concerned. The purpose of
this limitation is to provide a reasonable basis for judging the performance of an
elective local official. As long as the election is held outside the one year period
from assumption from office of the local official sought to be recalled, the
preliminary proceedings to initiate recall can be held even before the end of the first
year in office of said local official. (Claudio vs. COMELEC, 331 SCRA 388)
Resignation
Acceptance by Proper Authority. Resignation of elective local officials
shall be deemed effective only upon acceptance by the following authorities:
a. The President, in case of governors, vice-governors, and
mayors and vice-mayors of highly urbanized cities and independent
component cities.
b. The governor, in case of municipal mayors and vice-mayors,
city mayors and vice-mayors of component cities.
LOCAL OFFICIALS /77
c. Sanggunian concerned, in case of sanggunian members
d. The city or municipal mayor, in case of barangay officials.

Effectivity. Resignation takes effect upon acceptance. It is deemed


accepted if not acted upon within 15 working days. Irrevocable resignation by
sanggunian members takes effect upon presentation before an open session. (Sec.
82)
Practice of Profession
1. Governors or mayors are prohibited from practicing their profession
or engaging in any occupation.
2. Sanggunian members may practice their profession, engage in any
occupation, or teach except during session hours.
VGR, a lawyer and a Punong Barangay and Chairman of the
Lupong Tagapamayapa, presided over the conciliation proceedings in an
ejectment case. The parties to the case were not able to amicably settle their
dispute. Then one of the parties sought his legal assistance and handled her
case. In the course thereof, he prepared and signed pleadings including the
answer with counter claim, pre-trial brief, position paper and notice of
appeal. He is sued for violation of Rule 6.03 of the Code of Professional
Responsibility. The Court held that the Rule applies only to a lawyer who
has left the government service in connection with any matter in which he
intervened while in said service. Accordingly, as Punong Barangay, he was
not forbidden to practice his profession. However, he should have procured
prior permission or authorization from
the head of his Department (DILG Secretary), as required by civil service
rules and regulations, particularly Section 12, Rule XVIII of the Revised
Civil Service Rules. In acting as a counsel for a party without first securing
the required written permission, he not only engaged in the unauthorized
practice of law but also violated civil service rules which is a breach of rule
1.01 of the Code of professional Responsibility. (Catu vs. Rellosa, AC No.
5738, February 19, 2008)
3. Sanggunian members who are lawyers shall not:
a. Appear as counsel in any civil case where the local
government is the adverse party.
The complaint for illegal dismissal filed against the city
engineer is in effect a complaint against the city, who was the real
employer of the dismissed employees. A judgment against the city
engineer would actually be a judgment against the city. By serving
as counsel of the dismissed employees, petitioner, a city councilor
violated the provision against representing interests adverse to the
city. (Javellana vs. DILG, 212 SCRA 475)

LOCAL OFFICIALS /78

b. Appear as counsel in a criminal case where the accused is an


officer of the national or local government accused of an offense
committed in relation to his office.
c. Collect a fee for appearance in administrative proceedings
involving the local government unit of which he is an official.
d. Use property and personnel of the government except when
the sanggunian member is defending the interest of the
government.

4. Physicians may practice their profession even during office hours only on
emergencies and without monetary compensation. (Sec. 90)

Prohibited Appointment
1. No elective or appointive local official shall be eligible for
appointment or designation to any public office during his tenure.(Flores
vs.Drilon, 223SCRA 568)
2. Unless otherwise allowed by law or by the primary function of his
office, no elective or appointive local official shall hold any other office.
3. Except for losing candidates in barangay elections, no candidate
who lost in any election should be appointed to any office within one year
after election. (Sec. 94)

Disclosure of Business and Financial Interests


Every sanggunian member, upon assumption of office shall make a full
disclosure of his business and financial interests. He shall also disclose any
business, financial or professional relationship or any relationship within the fourth
degree which he may have with anyone affected by any ordinance or resolution of
the sanggunian which involves a conflict of interests.
Such relationship includes:
i. Investment in the entity to which the ordinance may apply
ii. Contracts with any person to which the ordinance may apply.
Conflict of interests refers to a situation where a sanggunian member may
not act in the public interest due to personal consideration that may affect his
judgment to the prejudice of the public. (Sec. 51)

Disciplinary Action for Local Elective Officials


1. Grounds
a. Disloyalty to the Republic of the Philippines.
b. Culpable violation of the Constitution.
c. Dishonesty, oppression, misconduct in office, gross
negligence, or dereliction of duty.
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d. Commission of an offense involving moral turpitude or punishable


by at least prision mayor.
e. Abuse of authority.
f. Unauthorized absence for 15 consecutive working days, except
sanggunian members.
i. Application for, or acquisition of, citizenship or residence or
immigrant status of another country.
j. Other grounds in this Code and other laws.

For disorderly behavior and absence without justifiable cause for


four consecutive sessions, a member of the Sanggunian may be censured,
reprimanded, excluded from the session, suspended for not more than 60
days, or expelled. Suspension or expulsion shall require concurrence of at
least two-thirds of all sanggunian members. A member sentenced by final
judgment to imprisonment for at least one year for a crime involving moral
turpitude shall be automatically expelled. (Sec.50)
In the performance of his duties, the Mayor should act within the
confines of the law and not resort to the commission of a felony a public
officer is proscribed from resorting to criminal acts in the enforcement of
the law and ordinances. (Maderazo vs. People, 503 SCRA 234)

2. Filing of complaints Jurisdiction (Political Disciplinary Authority)


a. Elective provincial or city officials Office of the President
b. Elective municipal official sangguniang panlalawigan,
whose decision may be appealed to the President
c. Elective barangay official sangguniang panlungsod or
bayan, whose decision shall be final. (Sec. 61)

3. No investigation shall be held and no preventive suspension shall be


imposed within 90 days before any local election. (Sec. 62)

4. Preventive suspension
a. Political Disciplinary Authority
i. Official of province, highly urbanized city or
independent component city President
ii. Official of component city or municipality Governor with recommendation of the
Sanggunian Panlalawigan
iii. Barangay official Mayor with recommendation of the Sanggunian
Bayan/Panlungsod
b. Grounds
i. Strong evidence of guilt.
ii. Probability that continuance in office can influence
or endanger safety of records.

LOCAL OFFICIALS /80

c. Duration
i. Single suspension 60 days
ii. Several suspension 90 days within a year
In criminal cases, a 90-day preventive suspension imposed
by the Sandiganbayan on a local elective official instead of the
maximum 60 days provided by Section 63 of the Local Government
Code is not flawed where the same was based on Section 13 of RA
3019, malversation of public funds being an offense involving fraud
against government funds and is clearly included among crimes
contemplated under that section. The Anti-Graft and Corrupt
Practices Act implicitly recognizes that the power of preventive
suspension lies in which the criminal charged is filed. The provision
pendent lite applies to all persons indicted upon a valid information
under the Act, whether they be appointive or elective officials. It
applies to a Municipal mayor, a Governor, a Congressman. It is
mandatory for a the court to place under preventive suspension a
public officer accused before it. (Nicart vs. Sandiganbayan, 495
SCRA 73)

5. Right to Due Process.


The respondent has the right to appear and defend in person or by
counsel, to confront the witnesses against him, and to compulsory process
to require the attendance of witnesses and production of evidence in his
favor. (Sec. 65)
In Joson vs. Torres, 290 SCRA 279, the Supreme Court ruled that
the denial of the motion of the Governor for formal investigation is
erroneous. His right to formal investigation is spelled out in Administrative
Order No. 23. He has the right to appear and defend himself in person or by
counsel, the right to confront the witnesses and the right to compulsory
attendance of witness and the production of documentary evidence. The
right of the Governor to formal investigation was not satisfied when the
complaint was decided on the basis of position papers.

6. Decision
To render a decision in administrative cases involving elective
officials, the decision of the Sanggunian must be in writing and stating
clearly and distinctly the facts and the reasons for such decisions. (Malinao
vs. Reyes, 255 SCRA 616) The so-called decision of a member of a
Sanggunian cannot be regarded as decision of the Sanggunian for lack of
signatures of the requisite majority. (Ibid.)

LOCAL OFFICIALS /81


7. Penalty and Power to Remove
a. The penalty of suspension shall not exceed the unexpired
term of the respondent, or a period of 6 months for every
administrative offense, nor bar his candidacy as long as he meets the
qualifications required for the office.
b. Removal from office shall bar candidacy of the respondent
for any elective office. (Sec. 66)
The Office of the President is without any power to remove
elected officials since such power is exclusively vested in thr proper
courts as expressly provided for in the last paragraph of Section 60
of the Local Government Code. (Salalima vs. Guingona, 257 SCRA
55)
Likewise, in Pablico vs. Villapando, 385 SCRA 601, it was
held that the power to remove erring elective local officials from
service is lodged exclusively with the courts. Hence, Article 124 (b),
Rule XIX of the rules and regulations implementing the Local
Government Code insofar as it vests power on the disciplining
authority to remove from office erring elective local officials, is
void for being repugnant to the last paragraph of Section 60 of the
Local Government. Such grant to the disciplining authority of
the power to remove elective local officials is clearly beyond the
authority of the Oversight Committee that prepared the rules and
regulations. No such regulation may alter, amend or contravene a
provision of law, such as the Local Government Code.
The law on suspension and removal of elective public
officials must be strictly construed and applied, and the authority in
whom such power of suspension or removal is vested must exercise
it with utmost good faith, for what is involved is not just an ordinary
public official but one chosen by the people through the exercise of
their constitutional right of suffrage. Their will must not be put to
naught by the caprice or partisanship of the disciplining authority.
When the disciplining authority is given only the power to suspend
and not the power to remove, it should not be permitted to
manipulate the law by usurping the power to remove. (Ibid.)
The removal from office of local elective officials must not
be tainted with partisan politics and used to defeat the will of the
voting public. Congress itself saw it fit to vest that power in a more
impartial tribunal, the court. Furthermore, the local government
units are not deprived of the right to discipline local elective
officials; rather, they are prevented from imposing the extreme
penalty of dismissal. (Sangguniang Barangay of Barangay Don
Mariano Marcos, Bayombong, NV vs. Punong Barangay Martinez,
GR 170626, March 3, 2008)
LOCAL OFFICIALS /82

8. Administrative Appeal
a. Period 30 days
b. Appellate authority
i. Sangguniang panlungsod of component cities and
sangguniang bayan sangguniang panlalawigan
ii. Sangguniang panlalawigan and sangguniang
panlungsod of highly urbanized cities and independent
component cities President
iii. President final (Sec. 67)
c. Execution
The decision shall be executory pending appeal and the
respondent shall be considered as under preventive suspension
should he win the appeal. In the event that the appeal results in
exoneration, he shall be paid his salary and such other emoluments
during the pendency of the appeal.(Sec. 68)
The decisions of the Office of the President under the Local
Government Code are immediately executory even pending appeal
because the pertinent laws under which the decisions were rendered
mandated them so. In sum, the decisions of the Office of
the President are final and executory. No motion for reconsideration
is allowed by law but the parties may appeal the decision to the
Court of Appeals. The appeal, however, does not stay the execution
of the decision, Thus, the DILG Secretary may validly move for its
immediate execution. (Calingin vs CA, 434 SCRA 173)
The phrase final and executory in Sections 61c, 67 and 68,
respectively, simply means that the administrative appeals will not
prevent the enforcement of the decisions. The decision is
immediately executory but the respondent may nevertheless appeal
the adverse decision to the Office of the President or to the
Sangguniang Panlalawigan, as the case may be. (Don vs. Lacsa, GR
170810, August 7, 2007)

9. Concurrent Jurisdiction of the Ombudsman


Under RA 6770, the Ombudsman Act of 1989, the Office of the
Ombudsman has disciplinary authority over all elective and appointive
officials of the government and its subdivisions, instrumentalities and
agencies including members of the cabinet, local governments, government
- owned and controlled corporations and their subsidiaries,
LOCAL OFFICIALS /83

except those who may be removed only by impeachment. On the other


hand, RA 7160, the Local Government Code, the Sangguniang Panlungsod
and Sangguniang Bayan have disciplinary authority over elective barangay
official. Thus, the Office of the Ombudsman has concurrent jurisdiction
with the local government units over administrative cases against elective
local officials. (Laxina vs. Office of the Ombudsman, 471 SCRA 542)

Power to Impose Preventive Suspension. RA 6770 empowers the


Ombudsman to impose a preventive suspension of a longer period of not
more than six (6) months. All appeals from the decisions of the
Ombudsman in administrative disciplinary cases may be taken to the Court
of Appeals under Rule 43 of the 1997 Rules of Civil Procedure.

Order of One-Year Suspension Not Final and Executory. A


decision of the Office of the Ombudsman finding respondent provincial
governor administratively liable for misconduct and imposing upon him a
penalty of one (1) year suspension without pay is not among those listed
in the Ombudsman Act of 1989 as final and unappealable, hence
immediately executory. There is no general legal principle which mandates
that all decisions of quasi-judicial agencies are immediately executory. Sec.
68 of the Local Government Code only applies to administrative decisions
rendered by the Office of the President or
appropriate Sanggunian against elective local government officials.
Similarly, the provision in the Administrative Code of 1987 mandating the
execution pending review applies specifically to administrative decisions of
the Civil Service Commission involving members of the civil service. There
is no basis in law for the proposition that the provisions of the
Administrative Code of 1987 and the Local Government Code on execution
pending review should be applied suppletorily to the provisions of the
Ombudsman Act as there is nothing in the Ombudsman Act which provides
for such suppletory application. (Gov. Lapid vs. CA, 334 SCRA 738)

Decisions Considered Final and Unappeallable. Any order,


directive or decision of the Office of the Ombudsman imposing the penalty
of public censure, or reprimand, or suspension of not more than one
months salary shall be final and unappeallable. The only effect of the
Fabian ruling is the designation of the Court of Appeals as the proper forum
and of Rule 43 of the Rules of Court as the proper mode of appeal; all other
matters provided for in Section 27 of RA 6770, including the finality and
the non-finality of decisions, are not affected and still stand. (Barata vs.
Abalos, GR No. 142888, June 6, 2001,Herrera vs. Bohol, GR No. 155320,
February 5, 2004)

HUMAN RESOURCES AND DEVELOPMENT /84

10. Effect of reelection


The reelection of a local official bars the continuation of the
administrative case against him and the case is deemed dismissed under the
Doctrine of Condonation. Any disciplinary proceedings against a
respondent is abated if in the meantime he is reelected, because his
reelection results in a condonation of whatever misconduct he might have
committed during his previous term.(Malinao, supra)
A Provincial Governor cannot be removed for administrative
misconduct committed during a prior term, since his reelection to office
operates as a condonation of the officers previous misconduct to the extent
of cutting off the right to remove him therefor. The foregoing rule, however,
finds no application to criminal cases against petitioner. (Aguinaldo vs.
Santos 212 SCRA 768)

A reelected local official may not be held administratively


accountable for misconduct committed during his prior term of office. The
rationale for this holding is that when the electorate put him back into
office, it is presumed that it did so with full knowledge of his life and
character, including his past misconduct. If, armed with such knowledge, it
still reelects him, then such reelection is considered a condonation of his
past misdeed. (Mayor Alvin B. Garcia vs. Hon. Arturo C. Mojica, 314
SCRA211, GR No139043, September 10, 1999)

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HUMAN RESOURCES AND DEVELOPMENT
A. Casual Employees
The local chief executive may employ casual employees without
approval of the Civil Service Commission for not more than 6 months. (Sec.
77)
B. Prohibited Interests
1. It is prohibited for any local government official to directly or
indirectly:
a. Engage in any business transaction with the local
government unit of which he is an official or over which he
has supervision, whereby money is to be paid or property is
to be transferred out of the resources of the local government
unit to him.
b. Hold interest in any cockpit or game licensed by the local
government unit.
The Local Government Code which specifically
prohibits local government officials from possessing
pecuniary interest in a cockpit licensed by the local
government unit and, which in itself, prescribes the
punishment for violation thereof, is paramount to the Anti-
Graft Law which penalizes possession of prohibited interest
in a general manner. (Teves, vs. Sandiganbayan, 447 SCRA
309)
Absent any evidence that the mayor divested himself
of his ownership over the cockpit, his ownership thereof is
rightly to be presumed because a thing once proved to exist
continues as long as is usual with things of that nature.
(Ibid.)
c. Purchase property forfeited to the local government unit for
unpaid taxes or by virtue of a legal process at the instance of
the local government unit.
d. Be a surety for any person contracting with the local
government unit.
e. Use any public property of the local government unit for
private purpose. (Sec. 89)
2. It is unlawful for any public official and his relatives within the
fourth civil degree of consaguinity or affinity to enter into any
contract for the construction, acquisition, operation or maintenance
of any project or procurement of materials or equipment with the
local government. (Sec. 520)
85

HUMAN RESOURCES AND DEVELOPMENT /86

C. Appointments and Limitations


Midnight Appointment. The constitutional prohibition on the so-
called midnight appointments, specifically those made within two months
immediately prior to the next presidential elections, applies only to the
President or Acting President. There is no law that prohibits local elective
officials for making appointments during the last days of their tenure absent
fraud on their part, when such appointments are not tainted by irregularities
or anomalies which breach laws and regulations governing appointment.
(De Rama vs. CA, 353 SCRA 650)
However, Memorandum Circular No. 9 s. 2003 issued by the Civil
Service Commission pursuant to CSC Resolution No. 030918 dated August
28, 2003, states that all appointments of whatever nature or status issued
within 45 days before any national or local elections shall be disapproved,
subject to the exception pursuant to Section 262 (g) of the Omnibus
Election Code. The CSC MC further states that all appointments issued by
elective appointing officials after elections up to June 30 shall be
disapproved except if the appointee is fully qualified for the position and
had undergone regular screening processes before the Election Ban as
shown in the Personnel Selection Board (PSB) report or minutes of meeting.
CSC Memorandum Ordr No. 19, S. of 1992, provides that heads of
departments appointed by the local chief executive must have the
concurrence of the majority of all the members of the Sanggunian
concerned. (Lameyra vs. Pangilinan. 322 SCRA 117)
The Lo cal Government Code explicitly vests on the Punong
Barangay, upon approval by a majority of all members of the Sangguniang
Barangay, the power to appoint or replace the barangay treasurer, the
barangay secretary, and other appointive officials. The power to appoint is
to be exercised conjointly by the punong barangay and a majority of all the
members of the sangguniang barangay. Without such conjoint action,
neither appointment nor a replacement can be effectual. Applying the rule
that the power to appoint includes the power to remove, the questioned
dismissal from the office of the barangay officials by the punong barangay
without the concurrence of the majority of all the members of the
Sangguniang Barangay cannot be legally justified. (Alquisola vs. Ocol, GR
No. 132413, August 27, 1999)
Appointment of Devolved Personnel. Since Section 17 of the
LGC authorizes the devolution of personnel, assets, liabilities, records of
basic services and facilities of a national government agency to local
government units, the City Mayor has the authority to reappoint devolved
personnel and may designate an employee to take charge of a department
until the appointment of a regular head. (Plaza vs. Cassion, 435 SCRA 294)
HUMAN RESOURCES AND DEVELOPMENT /87
Appointment of Assistant Provincial Treasurer. The Provincial
Governor is without authority to designate the petitioner as Assistant
Provincial Treasurer for Administration, because under Section 471 of the
Local Government Code, it is the Secretary of Finance who has the power
to appoint Assistant Provincial Treasurer from a list of recommendation of
the Provincial Governor. (Dimaandal vs. COA, 291 SCRA 322)
Prohibition on Nepotism. No person shall be appointed in the
career service if he is related within the fourth degree of consaguinity or
affinity to the appointing or recommending authority. (Sec. 79) However,
merely having the same family name, or middle name with the appointing
authority, does not nepotism make. Besides, the law does not absolutely
prohibit persons from being appointed to an office the appointing authority
of which is a relative so long as such relation, by consanguinity or affinity,
is not within the prohibited third degree. (Municipality of Butig, Lanao del
Sur vs. Court of Appeals, 477 SCRA 115)
Administrative Discipline for Appointive Officials
Generally, the power to appoint includes the power to remove employees
removed by a municipal mayor without having to secure the concurrence of the
Sangguniang Bayan may be similarly terminated by him without the need to secure
the concurrence of the Sangguniang Bayan. (Municipality of Libertad, Negros
Oriental vs. Penaflor, 453 SCRA 883)
Investigation and adjudication of administrative complaints against
appointive local officials and employees including their suspension and removal
shall be in accordance with the civil service law and rules and other pertinent laws.
a. Preventive suspension
The Local Chief Executive may preventively suspend for a period
not exceeding 60 days any subordinate official or employee under his
authority pending investigation if the charge against such official or
employee involves dishonesty, oppression or grave misconduct or neglect in
the performance of duty, or if there is reason to believe that the respondent
is guilty of the charges which would warrant his removal from service.
b. Disciplinary jurisdiction
Except as otherwise provided by law, the Local Chief Executive
may impose the penalty of removal from service, demotion in rank,
suspension for not more than one year without pay, fine in an amount not
exceeding 6 months salary, or reprimand. If the penalty imposed is
suspension without pay for more than 30 days, his decision shall be final; if
the penalty imposed is heavier, the decision shall be appealable to the Civil
Service Commission which shall decide the appeal within 30 days from
receipt thereof.
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VIII. LOCAL INITIATIVE AND REFERENDUM
A. Initiative
1. Procedure
a. Number of signatures of voters
i. At least 1,000 in provinces and cities
ii. At least 100 I municipalities
iii. At least 50 in barangays
b. Period to collect signatures
i. 90 days in provinces
ii. 60 days in municipalities
iii. 30 days in barangays
2. Limitations on Initiatives
a. The power of initiative shall not be exercised more than
once a year
b. It shall extend only to matters within the power of the
sanggunian to enact
In delineating the scope of an initiative or
referendum, Section 32, Article VI of the Constitution
includes any act of a local legislative body. The Constitution
includes not only ordinances but resolutions as appropriate
subjects of a local initiative. Section 3(6) of RA 6735
expressly includes resolutions as subjects of initiative on
local legislations. Section 124 of the Local Government
Code includes all matters within the legal powers of the
Sanggunian to enact in the scope of initiative, which
includes resolutions. (Garcia vs. COMELEC, 237 SCRA
279)
c. If the sanggunian adopts the proposition, the initiative shall
be cancelled. (Sec. 124)
3. Limitations on Sanggunian
a. Any proposition or ordinance approved through initiative or
referendum shall not be repealed or amended by the
sanggunian within 3 years by three-fourths vote of all
members.
b. In case of barangays, the period of 18 months after approval.
(Sec. 125)
B. Referendum
By referendum, the voters may approve, amend or reject any
ordinance enacted by the sanggunian. (Sec. 126)
88

LOCAL INITIATIVE AND REFERENDUM /89

Distinction Between Initiative and Referendum


Initiative is the power of the to propose amendments to the Constitution or
to propose and enact legislations through an election called for the purpose. Local
initiative is the legal process whereby the registered voters of a local government
unit may directly propose, enact, or amend any ordinance. Initiative is a process of
law-making by the people themselves without participation of their elected
representatives, while referendum consists of the electorate approving or rejecting
what has been enacted by a legislative body. (Subic Bay Metropolitan Authority vs.
Commission on Elections, 262 SCRA 492)

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REVIEW NOTES

LAWS ON PUBLIC CORPORATION

By

Atty. Hilario Justino F. Morales

Law Professor &


Head, Department of Political Law
SLU College of Law
Pre-bar Reviewer, Powerhaus Law Review Center
CPRS Bar Review Center & Lex Reviews & Seminars
November, 2010

TABLE OF CONTENTS

I. General Principles. . . . . . . . . . . . . . . . . . . . . . . . . P 1
II. The Local Government Code of 1991:
Salient Features. . . . . . . . . . . . . . . . . . . . . P 2
Rules of Interpretation. . . . . . . . . . . . . . . . . . . . .. P 2
Declaration of State Policies. . . . . . . . . . . . . . . ... P 4

III. Inter-Governmental Relations. . . . . . . . . . . . . . . P 8


Power of Control and General Supervision,
Distinguished. . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 9
Special Local Bodies. . . . . . . . . . . . . . . . . . . . . . . P12
IV. Creation, Conversion, Division, Merger and
Consolidation of LGUs. . . . . . . . . . . . . . . . . . . . P15
V. Powers of Local Government Units
General Welfare Police Power. . . . . . . . . . . . . P28
Validity of Ordinances and Acts of LGUs. . . . . P29
Power to Generate and Apply Resources. . . . . . P37
Eminent Domain. . . . . . . . . . . . . . . . . . . . . . . . . . P43
Reclassification of Lands. . . . . . . . . . . . . . . . . . . P45
Closure and Opening of Roads. . . . . . . . . . . . . . P48
Naming of LGUs, Public Places, Streets
And Structures. . . . . . . . . . . . . . . . . . . . . P49
Settlement of Boundary Disputes. . . . . . . . . . . . P50
Authority Over Police Units. . . . . . . . . . . . . . . .. P52
Local Legislative Power. . . . . . . . . . . . . . . . . . . . P52
Corporate Powers. . . . . . . . . . . . . . . . . . . . . . . . . P57
VI. Municipal Liability. . . . . . . . . . . . . . . . . . . . . . . . P62
VII. Local Officials. . . . . . . . . . . . . . . . . . . . . . . . . . . . P64
Common Qualifications. . . . . . . . . . . . . . . . . . . . P64
Disqualifications. . . . . . . . . . . . . . . . . . . . . . . . . . P67
Vacancies and Successions . . . . . . . . . . . . . . . . . P73
Recall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. P76
Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P76
Practice of Profession . . . . . . . . . . . . . . . . . . . . .. P77
Prohibited Appointment. . . . . . . . . . . . . . . . . . .. P78
Disciplinary Action. . . . . . . . . . . . . . . . . . . . . . . . P78
Human Resource Development. . . . . . . . . . . . . . P85
VIII. Local Initiative and Referendum. . . . . . . . . . . . P88

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