VILLAFUERTE v.

ROBREDO
G.R. No. 195390
December 10, 2014

FACTS:
In 1995, the Commission on Audit found that some LGUs had actually used 20% of their
Internal Revenue Allotment (IRA) for Maintenance and Other Operating Expenses (MOOE), in
violation of R.A. No. 7160 or the Local Government Code of 1991 (LGC). Following this, on
September 20, 2005, then DILG Sec. Angelo Reyes and DBM Sec. Romulo Neri issued Joint
Memorandum Circular No. 1, s. 2005, which contained guidelines on the proper use of the said
20% for development projects. On August 31, 2010, respondent incumbent DILG Sec. Jesse
Robredo issued Memorandum Circular (MC) No. 2010-83, which mandated local chief
executives to publicly post budget statements such as the CY 2010 Annual Budget and CY 2010
20% of the IRA Utilization. Afterward, on December 2 that same year he issued MC No. 2010-
138, which provided a list of expenses for which 20% of the IRA must not be utilized. On
January 13, 2011, respondent issued MC No. 2011-08, which imposed strict compliance with
Secs. 288 and 354 of the LGC and MC No. 2010-83.

On February 21, 2011, petitioner then Camarines Sur Gov. Luis Raymund Villafuerte, Jr. and the
Provincial Government of Camarines Sur filed a petition for certiorari, seeking to nullify MC
Nos. 2010-83, 2010-138, and 2011-08.

ISSUE:
Whether Memorandum Circulars Nos. 2010-83, 2010-138, and 2011-08 violate the principles of
local and fiscal autonomy in the Constitution and the LGC.

HELD:
NO.
Petitioners assert that MC No. 2010-83 is mandatory in nature, and by issuing it respondent has
exceeded his supervisory powers. A reading of the assailed circular reveals that it is in fact an
advisory to LGUs reminding them to observe Sec. 287 of the LGC in utilizing 20% of their IRA.
Likewise, the enumeration provided by MC No. 2010-138 is not meant to restrict LGUs’
discretion in using their funds. Rather, the list is meant to show what expenses are not covered
by the development fund, and LGUs remain at liberty to map out their own development plans.
Contrary to petitioners’ claims, the said circulars also do not provide sanctions for non-
compliance, but only reminds LGUs to adhere to existing rules regarding the 20% development
fund.

It must also be stressed that the state policy of LGU autonomy outlined in Art. X of the
Constitution does not totally sever them from the national government. In Ganzon v. Court of
Appeals, the Court mentioned the paradoxical dynamic where local governments are subject to
limited regulation to enhance self-government. At any rate, MC Nos. 2010-83 and 2011-08 are
really implementations of the constitutional mandate of transparency and accountability, as
reiterated in the LGC and R.A. No. 9184.
RESULT:
Petition is dismissed for lack of merit.