PUBLIC CORPORATION 1991.

INTRODUCTION Under the 1987 Constitution, declared policy: The State

shall ensure the autonomy of local governments (Art. II, Sec. 25)
Political Law – branch of public law which deals with the
organization and operations of the governmental organs of the To highlight this policy, note, an entire Article (X) with
State and defines the relations of the State with the inhabitants of fourteen sections is devoted to “Local Governments”. Section (3)
its territory. thereof mandates: Congress SHALL enact a local government
code (a) to provide a more responsive and accountable local
government structure initiated through a system of
DIVISIONS OF POLITICAL LAW: DECENTRALIZATION with effective mechanisms of recall, initiative
and referendum, (a) allocate among different local government
(a) Constitutional Law – branch of public law which units their powers, responsibilities and resources, (c) provide for
deals with the maintenance of the proper balance qualifications, elections appointment and removal, term, salaries,
between authority as represented by three inherent powers and function and duties of local officials and (d) other
powers of the State and liberty as guaranteed by matters relating to the organization and operation of local units.
the Bill of Rights.
(b) Administrative law – branch of public law which fixes Autonomy – is either decentralization of administration
the organization of government, determines (deconcentration) or decentralization of power (devolution).
competence of administrative authorities who
execute the law and indicates to the individual Decentralization of administration – delegation by the central
remedies for violation of his rights. government of administrative powers to local subdivisions in
(c) Law on Municipal Corporations order to broaden the base of governmental power making such
(d) Law of Public Officers local governments “more responsive and accountable” and
(e) Election Laws insuring their fullest development as self-reliant communities and
(f) Public International Law effective partners in the pursuit of national development and
progress” (declared policy of LGC); relieves central government of
the burden of managing local affairs, enabling it to concentrate
GENERAL PRINCIPLES on national concerns; the President exercises “general
supervision” over them but only to ensure that local affairs are
CORPORATION Defined: An artificial being created by operation of administered according to law (President’s mandate to ensure
law having the right of succession and powers, attributes and faithful execution of the laws) but he has no control over their
properties expressly authorized by law or incident to its acts (he cannot substitute their judgment with his own).
existence.
Decentralization of power –abdication of political power in favor of
CLASSIFICATION OF CORPORATIONS: local government units declared to be autonomous; the
autonomous government is free to chart its own destiny and
(i) Public – organized for the government of a shape its future with minimum intervention from central
portion of the State; authorities; amount to self-immolation since the autonomous
(ii) Private – formed for some private purpose, government becomes accountable not to the central authority but
benefit, aim or end; to its constituency.
(iii) Quasi-public – private corporation that
renders public service or supplies NOTE: Constitutional guarantee of Local Autonomy refers to
public wants. ADMINISTRATIVE AUTONOMY of local government units (or
decentralization of government authority).
NOTE: Criterion to determine whether a corporation is public –
The relationship of the corporation to the Sate, that is, if created
by the State as its own agency to help the State in carrying out its Case: PROVINCE OF BATANGAS vs. ALBERTO G. ROMULO, G.R. No.
governmental functions then it is public, otherwise, it is private. 152774, 5/27/2004.

CLASSES OF PUBLIC CORPORATIONS:
(i) Quasi-corporation – created by the State for
a narrow/limited purpose (PCSO, etc.);
(ii) Municipal Corporations – body politic and
corporate constituted by the incorporation
of the inhabitants for the purpose of local
government.
ELEMENTS OF MUNICIPAL CORPORATIONS:
FACTS: Province of Batangas filed a petition for certiorari to
declare unconstitutional and void certain provisos contained in
the General Appropriations Acts (GAA) of 1999, 2000 and 2001
earmarking for said years five billion pesos (P5,000,000,000.00)
of the Internal Revenue Allotment (IRA) for the Local Government
Service Equalization Fund (LGSEF) and imposed conditions for the
release thereof such as modifying the allocation scheme for such
allotment as prescribed under the Local Government Code and
securing approval for local projects from the Oversight Committee
on Devolution.

1. Legal creation or incorporation – there must be a law
creating/authorizing the creation or incorporation of
a municipal corporation];
2. Corporate name – name by which the corporation is
known;
3. Inhabitants – people residing in the territory of the
corporation;
4. Territory – land mass where the inhabitants reside
together with internal and external waters and air
space above the land and waters.
DUAL NATURE & FUNCTIONS OF MUNICIPAL CORPORATIONS:
Every local government unit created/organized under the Local
Government Code is a BODY POLITIC and CORPORATE endowed
with powers to be exercised by it in conformity with law. As such
it shall exercise powers as a political subdivision of the National
Government and as a corporate entity representing the
inhabitants of the territory (Section 15, RA7160). Accordingly, it
has dual functions –
(i) public or governmental – acts as an agent of
the State for the government of the territory
and the inhabitants; and
RULING: In Section 25, Article II of the Constitution, the State has
expressly adopted as a policy tha, “The State shall ensure the
autonomy of local governments”. The State policy on local
autonomy is amplified in Section 2 thereof, “It is hereby declared
the policy of the State that the territorial and political subdivisions
of the State shall enjoy genuine and meaningful local autonomy
to enable them to attain their fullest development as self-reliant
communities and make them more effective partners in the
attainment of national goals x x x .
The assailed provisos in the GAAs of 1999, 2000 and 2001 and
the OCD resolutions violate the constitutional precept on local
autonomy. Section 6, Article X of the Constitution reads: Sec. 6.
Local government units shall have a just share, as
determined by law, in the national taxes which shall be
automatically released to them. "Automatic" means "involuntary
either wholly or to a major extent so that any activity of the will is
largely negligible; of a reflex nature; without volition; mechanical;
like or suggestive of an automaton. Being "automatic," thus,
connotes something mechanical, spontaneous and perfunctory.
As such, the LGUs are not required to perform any act to receive
the "just share" accruing to them from the national coffers. The
"just share" of the LGUs is incorporated as the IRA in the
appropriations law or GAA enacted by Congress annually.

(ii) private or proprietary – acts as an agent of the
community in the administration of local affairs,
as such, acts as a separate entity for its own
purposes and not as a subdivision of the State.
BASIC PRINCIPLES
Sec. 1 – Act shall be known as the Local Government Code of
The entire process involving the LGSEF’s distribution and release
is constitutionally impermissible. The LGSEF is part of the IRA or
“just share” of the LGUs in the national taxes. Submitting its
distribution and release to the vagaries of the implementing rules
including the guidelines and mechanisms unilaterally prescribed
by the Oversight Committee from time to time as sanctioned by
the challenged laws and OCD resolutions, makes the release not
automatic – a flagrant violation of the constitutional and statutory
mandate that LGUs’ just share shall be automatically released to

1
them.
Meaning of Administrative Regions – are mere grouping of
contiguous provinces for administrative purposes, not for political
representation. The division of the country into regions is
intended to facilitate not only the administration of local
governments which the law requires to have regional offices.
Creation of administrative regions for purpose of expediting the
delivery of services is nothing new. The Integrated Reorganization
plan of 1972, which was made part of the law of the land by
virtue of Presidential Decree No. 1, established 11 regions, later
became 12. With definite regional centers and required
departments and agencies of the Executive Branch of the
National Government to set up field offices therein (DTI VII, DOLE
VII, DPWH Regional Office). The functions of the regional offices is
to be established pursuant the reorganization plan are: (a)
implement laws, policies, plans, programs, rules and regulation of
the department or agency in the regional area; (2) provide
economical, efficient and effective services to the people in the
area; (3) to coordinate with regional offices of other departments,
bureaus and agencies in the area; and (3) perform such other
functions as may be provided by law.
Decentralization comes in two forms — deconcentration and
devolution. Deconcentration (administrative decentralization) is
administrative in nature; it involves the transfer of functions or
the delegation of authority and responsibility from the national
office to the regional and local offices. Devolution, on the other
hand, connotes political decentralization, or the transfer of
powers, responsibilities, and resources for the performance of
certain functions from the central government to local
government units.
By regional autonomy, the framers intended it to mean
"meaningful and authentic regional autonomy (that is, a kind of
local self-government which allows the people of the region or
area the power to determine what is best for their growth and
development without undue interference or dictation from the
central government). To this end, Section 16, Article X limits the
power of the President over autonomous regions. In essence, the
provision also curtails the power of Congress over autonomous
regions. Consequently, Congress will have to re-examine national
laws and make sure that they reflect the Constitution's adherence
to local autonomy. And in case of conflicts, the underlying spirit
which should guide its resolution is the Constitution's desire for
genuine local autonomy.

Meaning of Autonomous Regions – creation of autonomous E.O. 426 officially devolved the powers and functions of the
regions in Muslim Mindanao and the Cordilleras, which is unique DPWH in ARMM to the Autonomous Regional Government (ARG).
to the 1987 Constitution, contemplates grant of political More importantly, Congress itself through R.A. 9054 transferred
autonomy and not just administrative autonomy to those regions. and devolved the administrative and fiscal management of public
Thus, Art. X, Section 18 of Constitution mandates for Congress to works and funds for public works to the ARG. The aim of the
enact an organic act for the autonomous regions (with assistance Constitution is to extend to the autonomous peoples, the people
and participation of consultative commission composed of of Muslim Mindanao in this case, the right to self-determination —
representatives appointed by the President from list of nominees a right to choose their own path of development; the right to
of multisectoral bodies) to provide for an autonomous regional determine the political, cultural and economic content of their
government with a basic structure consisting of an executive development path within the framework of the sovereignty and
department and a legislative assembly and special courts with territorial integrity of the Philippine Republic. Self-determination
personal, family and property law jurisdiction in each of the refers to the need for a political structure that will respect the
autonomous regions. autonomous peoples' uniqueness and grant them sufficient room
for self-expression and self-construction.
Case: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848,
11/25/2004. With R.A. 8999, however, this freedom is taken away, and the
National Government takes control again. The hands, once more,
FACTS: Pursuant to Sec. 15, Art. X of the Constitution (for the of the autonomous peoples are reined in and tied up. The
creation of autonomous regions in Muslim Mindanao and the challenged law creates an office with functions and powers which,
Cordilleras), RA 6734 (An Act Providing for An Organic Act for the by virtue of E.O. 426, have been previously devolved to the
Autonomous Region in Muslim Mindanao) was enacted. DPWH-ARMM, First Engineering District in Lanao del Sur.
Subsequently, the four provinces of Lanao del Sur, Maguindanao,
Sulu and Tawi-Tawi, voting in favor of autonomy, became the Section 2, LGC- Declaration of Policy - LGU to enjoy genuine and
Autonomous Region in Muslim Mindanao (provinces of Basilan, meaningful autonomy to enable them to attain their fullest
Cotabato, Davao del Sur, Lanao del Norte, Palawan, South development as self-reliant communities and make them effective
Cotabato, Sultan Kudarat, Zamboanga del Norte, and Zamboanga partners in attainment of national goals – thru decentralization.
del Sur, and the cities of Cotabato, Dapitan, Dipolog, General National agencies and offices to conduct periodic consultations
Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga with appropriate lgu, ngo and po, before any proect or program is
said no in the plebiscite) (later virtue of RA9054, the provinces of implemented in their jurisdiction.
Basilan and Marawi City joined). In accordance with RA6734,
EO426 was issued placing the control and supervision of the The declaration of policy as stated in Section 2 of LGC reinforces
offices of the DPWH within the autonomous region in Muslim declared State policy (Art. II, Sec. 25 of Constitution) ensuring
Mindanao under the Autonomous Regional Government. autonomy to local government units.
Petitioners Arsadi M. Disomangcop and Ramir M. Dimalotang
(Dimalotang), in their capacity as Officer-in-Charge and District Case: LINA VS. PANO 364 SCRA 76
Engineer/Engineer II, respectively, of the 1st Engineering District
of DPWH-ARMM in Lanao del Sur petitioned to nullify Dept. Order FACTS: Respondent Tony Calvento was appointed PSCO agent to
119 and RA8999 (creating the Marawi Sub-District Engineering install and operate a lotto terminal. Mayor of San Pedro Laguna
Office and vesting it with jurisdiction over all national denied his application for a business permit citing an ordinance
infrastructure projects and facilities under the DPWH within (Kapasyahan Blg. 508, taong 1995) passed by the Provincial
Marawi City and Lanao del Sur. Petitioners contend that the Board of Laguna, objecting/opposing any form of gambling
challenged measures violate ARMM’s constitutional autonomy including lotto in Laguna. Calvento arguing that KB508 is
considering that the functions of the Marawi Sub-District curtailment of State power since in this case the national
Engineering Office have already been devolved to the DPWH- legislature itself already declared lotto as legal and permitted its
ARMM 1st Engineering District in Lanao del Sur. operation around the country, filed for declaratory relief before
the RTC, to annul KB 508 and compel the the local mayor to issue
RULING: Petition GRANTED. DO119 is violative of the provisions of a business permit for the operation of a lotto outlet. Suit decided
EO426 (issued pursuant to RA6734). The 1987 Constitution in Calvento’s favor. MR by Respondent denied. Petition with SC.
mandates regional autonomy to give a bold and unequivocal
answer to the cry for a meaningful, effective and forceful RULING: Game of lotto is a game of chance duly authorized by
autonomy. Autonomy, as a national policy, recognizes the the national government through an Act of Congress (RA1169), as
wholeness of the Philippine society in its ethnolinguistic, cultural amended by BP42, the law granting a franchise to the PCSO and
and even religious diversities. It strives to free Philippine society allows it to operate lotteries. This statute remains valid today.
of the strain and wastage caused by the assimilationist approach. While lotto is a game of chance, the national government deems
Policies emanating from the legislature are invariably it wise and proper to permit it. Hence, the Provincial Board of
assimilationist in character despite channels being open for Laguna, as a LGU, cannot issue a resolution or an ordinance that
minority representation. would seek to prohibit permits. What the national legislature
allows by law, such as lotto, a provincial board may not disallow
A necessary prerequisite of autonomy is decentralization. by ordinance or resolution.
Decentralization is a decision by the central government
authorizing its subordinates, whether geographically or Ours is till a unitary government, not a federal state. Being so,
functionally defined, to exercise authority in certain areas. It any form of autonomy granted to LGs will necessarily be limited
involves decision-making by subnational units. It is typically a and confined within the extent allowed by the central
delegated power, wherein a larger government chooses to government. Besides, the principle of local autonomy under the
delegate certain authority to more local governments. Federalism 1987 Constitution simply means decentralization. It does not
implies some measure of decentralization, but unitary systems make local governments sovereign within the state or an
may also decentralize. Decentralization differs intrinsically from “imperium in imperio”.
federalism in that the sub-units that have been authorized to act
(by delegation) do not possess any claim of right against the Municipal governments are only agents of the national
central government. government. Local councils exercise only delegated legislative
powers conferred upon them by Congress as the national

2
lawmaking body. The delegate cannot be superior to the principal When is statute AMBIGIOUS? If capable of being understood by
or exercise powers higher than those of the latter. It is heresy to reasonably well-informed persons in either of two or more senses.
suggest that the LGUs can undo the acts and negate by mere
ordinance the mandate of the statute. Power of judicial review can be exercised by courts to invalidate
constitutionally infirm acts. Ergo, courts are not bound by
Section 2(c) requiring consultations should be read together with legislative interpretation of their own acts.
Section 26, 27, LGC (prior consultation by national agencies with
lgus involving projects that may cause pollution, climatic change, De Facto Municipal Corporations requisites:
depletion of non-renewable resources, loss of crop land, range- Valid law authorizing incorporation; attempt in good faith to
land or forest cover and extinction of animal or plant species). organize under it; colorable compliance with law, assumption of
Thus, Section 2(c) does not apply to lotto, the latter being neither corporate powers.
a program nor project of the national government, but of a
charitable institution, the PCSO. Also, the argument is an
afterthought, Mayor denied application for business permit solely MUNICIPAL CORPORATIONS
on ground of KB508.
Elements: (a) legal creation/incorporation – there must be a law
Section 3, LGC – Operative Principles of Decentralization – policies creating/authorizing creation or incorporation of a municipal
and measures on local autonomy to be guided by these: corporation; (b) corporate name- name by which the corporation
shall be known; (c) inhabitants – people residing in the territory of
(a) effective allocation among the different LGUs of their the corporation; and (d) territory – land mass where inhabitants
respective powers, functions and responsibilities [is provided for reside together with internal and external waters and airspace
by LGC], above land and waters.

(b) establishment in every LGU of an accountable, efficient and Section 6 – Authority to Create LGU – (created, divided, merged,
dynamic organizational structure and operating mechanism that abolished or borders substantially altered) either by LAW enacted
will meet priority needs and service requirements of its by Congress in the case of province, city, municipality or any
communities, other political subdivision, or ORDINANCE by sangguniang
panlalawigan/panglungosd in the case of a barangay located
(c) local officials and employees, subject to civil service law, rules within its territorial jurisdiction, subject to limitations prescribed
and regulation, to be appointed or removed, according to merit in this Code.
and fitness, by the appropriate appointing authority,
Section 7 – Creation/Conversion of LGU – generally, creation of
(d) vesting of duty, responsibility and accountability in LGUS shall LGU or its conversion from one level to another, subject to
be accompanied with provision for reasonably adequate verifiable indicators of viability and projected capacity to provide
resources to discharge their powers and effectively carry out their services: INCOME, POPULATION and LAND AREA, compliance with
function – they shall have the power to create and broaden their which to be attested to by the Dept. of Finance, NSO and Land
own sources of revenue and the right to a just share in the Management Bureau of DENR.
national taxes and an equitable share in proceeds of the
utilization and development of the national wealth within their Income – must be sufficient, based on acceptable standards to
respective areas provide all essential government facilities and services and
special functions commensurate with the size of its populations,
(e) provinces – to component cities and municipalities; cites and as expected of the LGU concerned.
municipalities – to component barangays to ensure that acts of
component units are within scope of prescribe powers and Population – total number of inhabitants within the territorial
functions (supervisorial powers) jurisdiction of the LGU concerned.

(f) LGUs may group themselves, consolidate their efforts, services Land Area – must be contiguous, unless it comprises two (2) or
and resources for purposes commonly beneficial to them – thus, more islands or is separated by a LGU independent of the others
MMDA; properly identified by metes and bounds with technical
descriptions and sufficient to provide for such basic services and
NOTE: Autonomy denotes “state of independence” (referred facilities to meet the requirements of its populace.
previously to states) – community autonomy, that is, local
autonomy. In the LGC, local autonomy does not mean total (READ GRINO VS. COMELEC 213 SCRA 672)
independence of LGUS from the central or national government. It
only means decentralization of powers from national to local Section 8 – Division/Merger of existing LGUs – to comply with
government. When exercising governmental powers and same requisites for creation under Section 7. No reduction in
performing duties, a LGU is an agency of the national income, population or land area; no reduction in current income
government. classification.

Section 4, LGC – Scope of Application – scope means areas of Section 9 – Abolition – LGU may be abolished when its income,
coverage, that is, to provinces, cities, municipalities and population or land aea has been irreversibly reduced to less than
barangays and other political subdivisions as may be created by the minimum standards prescribed for its creation (as certified by
law and to the extent herein provided to officials, offices or DOF, NSO and LMB); law/ordinance abolishing an LGU to specify
agencies of the National Government. province, city, municipality or barangay to which the LGU to be
abolished will be incorporated or merged.
Section 5, LGC – Rules of Interpretation – (a) provision on power
of LG shall be liberally interpreted in its favor; in case of doubt, Section 10 – Plebiscite requirement – pre-condition to creation,
any question shall be resolved in favor of devolution of powers abolition, merger, division or substantial alteration of boundaries
and of the lower LGU. Any fair and reasonable doubt as to of LGUs; requires majority of the votes cast in plebiscite called for
existence of power, interpreted in favor of LGU concerned the purpose in the political unit/s directly affected; plebiscite to
be conducted by COMELEC within 120 days from date of
(b) doubt as to any tax ordinance or revenue measure, strictly effectivity of law/ordinance effecting such action, unless said
construed against LGU, liberally in favor of taxpayer (deprivation law/ordinance fixes another date.
of property). Tax exemption, incentive r relief granted any LGU,
construed strictly against person claiming it (loss of income on Section 11- Seat of Government - considerations of
part of LGU). GEOGRAPHICAL CENTRALITY, ACCESSIBILITY, AVAILABILITY OF
TRANSPORATION AND COMMUNICATION FACILITIES, DRAINAGE
(c) liberal interpretation of general welfare provisions in order to AND SANITATION DEVELOPMENT, ECONOMIC PROGRESS and
give more power to LGU in accelerating economic development OTHER RELEVANT CONSIDERATIONS; transfer of seat when
and upgrading quality of life for the people. conditions and development in LGU concerned has subsequently
changed significantly, requires 2/3 vote of members of
Note: Basic precept in statutory construction that legislative sanggunian, after public hearing; transfer site shall not be outside
intent is the controlling factor in the interpretation of statute. the territorial boundaries of the LGU; old site together with
Power to declare what the law shall be is a legislative power, improvements thereon may be disposed of by sale or lease or
power to declare what the law is or has been is judicial. When law converted to such other use as the sanggunian concerned may
is unambiguous and unequivocal, application and not deem beneficial to the LGU and its inhabitants.
interpretation thereof is IMPERATIVE.

When is statute AMBIGIOUS? If capable of being understood by Section 12 – Government Centers – Provinces, cities and
reasonably well-informed persons in either of two or more senses. municipalities shall endeavor to establish a government center
where offices, agencies or branches of the National Government,
Power of judicial review can be exercised by courts to invalidate lgu or government-owned or controlled corporations may, as far
constitutionally infirm acts. Ergo, courts are not bound by as practicable, be located. In designating such a center, the lgu
legislative interpretation of their own acts. concerned shall take into account the existing facilities of the
national and local agencies and offices which may serve as the

3
government center as contemplated under this Section. The organized under color of a statute before this was declared
National Government, the lgu or gocc shall bear the expenses for unconstitutional (by Pelaez ruling), its officers having been either
the construction of its buildings and facilities in the government elected or appointed, and the municipality itself having
center. discharged its corporate functions for the past five years
preceding the institution of this action. That as a de facto
Section 13 – Name of LGU and Public Places, Streets and corporation, its existence cannot be collaterally attacked,
Structures – always in consultation with Philippine Historical although it may be inquired into directly in an action for quo
Commission; prohibition against naming after living persons, warranto at the instance of the State and not of an individual like
change of name not oftener than once every 10 years unless for the petitioner Balindong.
justifiable reason; change requires prior plebiscite; change of
name involving a lgu, public place, street or structure with DECISION: Petition granted, Executive Order 386 declared void.
historical, cultural or ethnic significance can be done only by a Generally, the inquiry into the legal existence of a municipality is
UNANIMOUS VOTE of the sanggunian concerned and in reserved to the State in a proceeding for quo warranto or other
consultation with the PHC. direct proceeding, and that only in a few exceptions may a
private person exercise this function of government. But the rule
disallowing collateral attacks applies only where the municipal
Section 14 – Beginning of Corporate Existence – When a new LGU corporation is at least a de facto corporation. For where it is
is created, its corporate existence shall commence upon election neither a corporation de jure nor de facto, but a nullity, the rule is
and qualification of its chief executive and majority of members that its existence may be questioned collaterally or directly in any
of sanggunian. action or proceeding by any one whose rights or interests are
affected thereby, including the citizens of the territory
MEJIA vs. BALOLING 81 PHIL 486 – Since a city is a public incorporated unless they are estopped by their conduct from
corporation or juridical entity, and as such cannot operate or doing so.
transact business by itself but through agents and officials, it is
necessary that officials thereof be appointed or elected in order A de facto municipal corporation is recognized as such despite
that it may transact business as such public corporation or city. the fact that the statute creating it was later invalidated, rests
upon the consideration that there was some other valid law giving
corporate validity to the organization. Hence, in the case at bar,
NOTE: De Facto Municipal Corporations requisites: Valid law the mere fact that Balabagan was organized at a time when the
authorizing incorporation; attempt in good faith to organize under statute had not been invalidated cannot conceivably make it a de
it; colorable compliance with law, assumption of corporate facto corporation, as, independently of Section 68 of the
powers. Administrative Code, there is no other valid statute to give color
of authority to its creation. Thus, Executive Order 386 creating
Case: EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L- the municipality in question is a nullity pursuant to the ruling in
23825, 1/24/1965 Pelaez ruling. This is not to say, however, that the acts done by
the municipality of Balabagan in the exercise of its corporate
FACTS: President of the Philippines, purporting to act pursuant to powers are a nullity because the executive order "is, in legal
Sec. 68 of Revised Administrative Code (presidential authority to contemplation, as inoperative as though it had never been
define the boundary, or boundaries, of any province, sub- passed." Note, the existence of Executive Order 386 is "an
province, municipality, [township] municipal district or other operative fact which cannot justly be ignored." The actual
political subdivision, and increase or diminish the territory existence of a statute, prior to such a determination, in an
comprised therein, may divide any province into one or more operative fact and may have consequences which cannot justly
subprovinces, separate any political division other than a be ignored. The past cannot always be erased by a new judicial
province, into such portions as may be required, merge any of declaration. The effect of the subsequent ruling as to invalidity
such subdivisions or portions with another, name any new may have to be considered in various aspects — with respect to
subdivision so created, and may change the seat of government particular relations, individual and corporate, and particular
within any subdivision to such place therein as the public welfare conduct, private and official.
may require), issued several executive orders creating 33
municipalities. Petitioner (as Vice-President and as taxpayer), Case: MUN. OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No.
instituted a special civil action seeking to enjoin Auditor General 105746. 12/2/1996
from passing in audit any expenditure of public funds in
implementation of said certain executive orders and/or FACTS: In 1949, Pres. Elpidio Quirino (pursuant to Sec. 68 of
disbursement by said municipalities. Revised Admin Code) issued EO258 creating the Municipality of
Sinacaban consisting Petitioner’s southern portion. In 1988, the
DECISION: PETITION GRANTED. Since January 1, 1960, when Municipality of Sinacaban filed with the Provincial Board of
Republic Act No. 2370 became effective, barrios may "not be Misamis Occiental a claim against Petitioner over portions
created or their boundaries altered nor their names changed" affecting certain barrios based on the technical description in E.O.
except by Act of Congress or of the corresponding provincial No. 258. Petitioner conceded that, under EO258 the disputed area
board "upon petition of a majority of the voters in the areas is part of Sinacaban, but nonetheless asserted jurisdiction on the
affected" and the "recommendation of the council of the basis of an agreement it had with the Municipality of Sinacaban
municipality or municipalities in which the proposed barrio is and approved by provincial board resolution in 1950. The board
situated." This statutory denial of the presidential authority to declared the disputed area to be part of Sinacaban ruling that the
create a new barrio implies a negation of the bigger power to previous resolution approving the agreement between the
create municipalities, each of which consists of several barrios. municipalities was void because the Board had no power to alter
the boundaries of Sinacaban as fixed in E.O. No. 258, that power
Whereas the power to fix a common boundary, in order to avoid being vested in Congress pursuant to the Constitution and the
or settle conflicts of jurisdiction between adjoining municipalities, LGC of 1983 (B.P. Blg. 337). Before the SC, Petitioner challenges
may partake of an administrative nature — involving, as it does, the trial court’s decision affirming the legal existence of
the adoption of means and ways to carry into effect the law Sinacaban and ordering the relocation of its boundary for the
creating said municipalities - the authority to create municipal purpose of determining whether certain areas claimed by it
corporations is essentially legislative in nature. belonged to it.

Case: MALABANG vs. BENITO, 27 SCRA 533 DECISION: The principal basis for the view that Sinacaban was not
validly created as a municipal corporation is the Pelaez ruling that
FACTS: Petitioner Balindong (municipal mayor of Malabang, Lanao the creation of municipal corporations is essentially a legislative
del Sur), Respondents (Mayor Benito and councilors of matter and therefore the President was without power to create
Municipality of Balabagan of the same province). Balabagan, by executive order Sinacaban. The ruling in this case has been
(formerly part of Malabang) was created on March 15, 1960, by reiterated in a number of cases later decided. However, we have
Executive Order 386 of the then President Carlos P. Garcia, out of since held that where a municipality created as such by executive
barrios and sitios of the Malabang. order is later impliedly recognized and its acts are accorded legal
validity, its creation can no longer be questioned. Sinacaban is at
Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act, least a de facto municipal corporation in the sense that its legal
approved January 1, 1960], vested power to create barrios in the existence has been recognized and acquiesced publicly and
provincial board, and Section 68 of the Administrative Code, officially. Sinacaban had been in existence for sixteen years when
insofar as it gives the President the power to create the Pelaez ruling yet the validity of E.O. No. 258 creating it had
municipalities, is unconstitutional (a) because it constitutes an never been questioned.
undue delegation of legislative power and (b) because it offends
against Section 10 (1) of Article VII of the Constitution, whichThe State and even the Municipality of Jimenez itself have
limits the President's power over local governments to mere recognized Sinacaban's corporate existence entering in 1950 into
supervision”), Petitioner sought to nullify E.O. 386 and restrain
an agreement with it regarding their common boundary. Also, it
respondents from performing their official functions. has attained de jure status, 442(d) of the LGC, must be deemed
to have cured any defect in the creation of Sinacaban.
Respondents argued that Pelaez ruling did not apply because, (“Municipalities existing as of the date of the effectivity of this
unlike the municipalities involved therein, the municipality of Code shall continue to exist and operate as such. Existing
Balabagan is at least a de facto corporation, having been municipal districts organized pursuant to presidential issuances or

4
executive orders and which have their respective set of elective
municipal officials holding office at the time of the effectivity of
the Code shall henceforth be considered as regular
municipalities”).
GENERAL POWERS & ATTRIBUTES OF LGUs
Sources of Powers – Article II, Section 25 and Article X of the
Constitution; statutes (eg. RA7160), charter.
no power to enact ordinances for the welfare of the community. It
is the local government units, acting through their respective
legislative councils, that possess legislative power and police
power. In the case at bar, the Sangguniang Panlungsod of Makati
City did not pass any ordinance or resolution ordering the opening
of Neptune Street, hence, its proposed opening by petitioner
MMDA is illegal and the respondent Court of Appeals did not err in
so ruling. We desist from ruling on the other issues as they are
unnecessary.

Section 15 – Political and Corporate Nature of LGUs – every LGU is Points of Discussion – Police power is inherent in the State,
a body politic and corporate endowed with powers to be exercised by the Legislature, but may be validly delegated. Upon
exercised by it in conformity with law. valid delegation, the exercise thereof by the delegate being
limited only to such powers as conferred by the legislature.
Dual Functions of LGU – (1) public/governmental – acts as an Legislature has delegated police power to LGUs (Sec. 15, LGC)
agent of State for the government of the territory and its through their respective legislative bodies, under the General
inhabitants; (2) proprietary/private – acts as an agent of the Welfare Clause (Sec. 16, LGC).
community in the administration of local affairs, and as such, it
acts as a separate entity for its own purposes and not as a
subdivision of the State. NOTE: RA 7924 declared Metropolitan or Metro Manila (body
composed of several LGUs, i.e., twelve (12) cities of Caloocan,
Municipal Corporation in the Philippines: Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa,
Las Piñas, Marikina, Parañaque and Valenzuela, and the five (5)
(1) Province (Sec. 459, LGC) – cluster of municipalities or municipalities of Malabon, Navotas, Pateros, San Juan and Taguig)
municipalities and component cities, as a political and as a "special development and administrative region" with the
corporate unit of government which serves as a dynamic administration of "metro-wide" basic services affecting the region
mechanism for developmental processes and effective placed under "a development authority" referred to as the MMDA
governance of LGUs within its territorial jurisdiction. (governed by the Metro Manila Council composed of the mayors
of the component 12 cities and 5 municipalities, the president of
(2) City (Sec. 448) – composed of more more urbanized and the Metro Manila Vice-Mayors' League and the president of the
developed barangays, serves as a general purpose Metro Manila Councilors' League) headed by the Chairman.
government for coordination and delivery of basic,
regular and direct services and effective governance of
the inhabitants within its jurisdiction; NOTE: When R.A. No. 7924 took effect, Metropolitan Manila
became a "special development and administrative region" and
the MMDA a "special development authority" whose functions
(3) Municipality (Sec. 440, LGC) – groups of barangays, were "without prejudice to the autonomy of the affected local
serves primarily as a general purpose government for government units." The character of the MMDA was clearly
coordination and delivery of basic, regular and direct defined in the legislative debates enacting its charter. MMDA not
services and effective governance of inhabitants within a special metropolitan political subdivision, because the latter’s
creation requires the approval by a majority of the votes cast in a
its jurisdiction;
plebiscite in the political units directly affected. 56 R.A. No. 7924
was not submitted to the inhabitants of Metro Manila in a
plebiscite. The Chairman of the MMDA is not an official elected by
(4) Barangay (Sec. 384, LGC) – basic political unit, serves as the people, but appointed by the President with the rank and
the primary planning and implementing unit of privileges of a cabinet member. In fact, part of his function is to
government policies, plans, programs, projects and perform such other duties as may be assigned to him by the
activities in the community and as a forum wherein President, 57 whereas in local government units, the President
collective views of people may be expressed, crystallized merely exercises supervisory authority. This emphasizes the
and considered where disputes are also amicably administrative character of the MMDA.
settled;

Section 16 – General Welfare Clause – LGUs shall exercise powers

(5) Autonomous Regions – refer to Article 10 of the expressly granted, those necessarily implied therefrom, as well as
Constitution. those necessary, appropriate or incidental for efficient and
effective governance (i.e. promote health, safety, enhance
prosperity, improve morals of inhabitants) – is the statutory grant
of police power to LGUs through their respective legislative
Note: Metropolitan Manila Development Authority is not a local bodies empowering them to enact ordinances and approve
government unit. The power delegated to MMDA is that given to resolutions and appropriate functions for the general welfare of
the Metro Manila Council to promulgate administrative rules and the LGU.
regulations in the
Note: Police power is an inherent attribute of sovereignty vested
Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000 in Congress to make, ordain and establish all manners of
wholesome and reasonable laws for the common good; it is
FACTS: Petitioner is a government agency tasked with delivery of plenary and its scope is vast and pervasive. However, by virtue of
basic services in Metro Manila. Respondent Bel-Air Village valid delegation, it may be exercised by LGUs. The latter being
Association, Inc. is a non-stock, non-profit corporation composed only agents can only exercise such powers as are conferred upon
of homeowners in Bel-Air Village, a private subdivision in Makati them by Congress.
City. Respondent had sought to enjoin Petitioner’s plan to
demolition the perimeter fence and open to public access Limits on LGUs police Power -
Neptune Street, a road (beside) privately/legally owned by the (1) Exercisable only within territorial limits of LGU
subdivision. The Court of Appeals, in reversing the dismissal of (2) Equal Protection Clause ( interest of public vs. those of a
Respondent’s complaint, ruled that Petitioner did not have the particular class requires exercise of such power)
authority to order the opening of the street in issue. Before the (3) Due Process Clause (reasonable means employed and not
SC, Petitioner asserted that, there was no need for an ordinance unduly oppressive – case of Villavicencio vs. Lukban, GR No.
from the City of Manila to open Neptune Street to public because, 14639, March 25, 1919)
as an agent of the State, it was endowed with police power in the (4) Not contrary to the Constitution and the laws (It cannot
delivery of basic services in Metro Manila including traffic legalize prohibited act under the guise of regulation. Likewise, it
management (involving regulation of the use of thoroughfares to cannot prohibit legal activities but only regulate)
insure the safety, convenience and welfare of the general public).
Note: Under Section 16, LGU to ensure and support preservation
DECISION: Petition DENIED. It is beyond doubt that MMDA is not a and enrichment of culture, promote health and safety, enhance
local government unit or a public corporation endowed with people’s right to balance and healthful ecology, improve public
legislative power. It is not even a “special metropolitan political morals, enhance economic prosperity and social justice,
subdivision” as contemplated in Sec. 11, Art. X of the maintenance of peace and order.
Constitution. MMDA’s powers are limited to formulation,
coordination, regulation, implementation, preparation, Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622,
management, monitoring, policy-setting, installation of a system 9/12/2002
and administration. There is no syllabus in RA7924 that grants
MMDA police power, let alone legislative power. PD 1596 (The Environmental Impact Statement System) ensures
environmental protection and regulates certain government
Clearly then, the MMC under P.D. No. 824 is not the same entity activities affecting the environment. Related to PD 1151
as the MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has
5
(Philippine Environment Policy), requires an environmental impact law governing local government units.
statement from all agencies and instrumentalities of the national
government, including government-owned or controlled The general welfare clause has two branches. The first, known as
corporations, as well as private corporations, firms and entities, the general legislative power, authorizes the municipal council to
for every proposed project and undertaking which significantly enact ordinances and make regulations not repugnant to law, as
affect the quality of the environment. may be necessary to carry into effect and discharge the powers
and duties conferred upon the municipal council by law. The
Davao City in 2000, applied for a certificate of non-coverage second, known as the police power proper, authorizes the
(CNC) for its proposed Davao City Artica Sports Dome project municipality to enact ordinances as may be necessary and proper
from the required Environmental Compliance Certificate (having for the health and safety, prosperity, morals, peace, good order,
been certified that its project is not located in an environmentally comfort, and convenience of the municipality and its inhabitants,
critical area (ECA). Application denied for the reason that Davao and for the protection of their property.
City must undergo the environmental impact assessment (EIA)
process to secure an Environmental Compliance Certificate (ECC), In the present case, the ordinances imposing licenses and
before it can proceed with the construction of its project. requiring permits for any business establishment, for purposes of
regulation enacted by the municipal council of Makati, fall within
Denial of application lead to complaint for injunction against the purview of the first branch of the general welfare clause.
DENR filed by Davao City. RTC ruled in latter’s favor reasoning Moreover, the ordinance of the municipality imposing the annual
that the laws do not require local government units (LGUs) to business tax is part of the power of taxation vested upon local
comply with the EIS law. Only agencies and instrumentalities of governments.
the national government, including government owned or
controlled corporations, as well as private corporations, firms and RE (closure order) - The bank was not engaged in any illegal or
entities are mandated to go through the EIA process for their immoral activities to warrant its outright closure. The appropriate
proposed projects which have significant effect on the quality of remedies to enforce payment of delinquent taxes or fees are
the environment. A local government unit, not being an agency or provided for in Section 62 of the Local Tax Code, (by distraint of
instrumentality of the National Government, is deemed excluded personal property, and by legal action). The law did not provide
under the principle of expressio unius est exclusio alterius. for closure which furthermore violated petitioner's right to due
process.
Petition for certiorari filed by Republic from RTC decision. Case
moot and academic when subsequent change in administration of Case: TANO vs. HON. GOV. SALVADOR P. SOCRATES, G.R. No.
Davao City which filed manifestation expressing that it needs to 110249, 8/21/ 1997
secure an ECC for its proposed project. But Court, for the
guidance of the implementors of the EIS law and pursuant to our FACTS: City Council of Puerto Princesa, Palawan, to effectively
symbolic function to educate the bench and bar, addressed the free city seawaters from cyanide and other obnoxious substances,
issue. passed Ordinance No. 15-92 (effective January 1, 1993) banning
the shipment of all live fish and lobster outside Puerto Princesa
Decision: Sec. 15, LGC (a local government unit is body politic from January 1, 1993 to January 1, 1998. To implement said city
and corporate endowed with powers to be exercised by it in ordinance, the acting city mayor issued Office Order No. 23,
conformity with law). As such, it performs dual functions, authorizing local law enforcers to to check or conduct necessary
governmental and proprietary. In exercise of governmental inspections on cargoes containing live fish and lobster being
powers and performing governmental duties, an LGU is an agency shipped out from the Puerto Princesa to ascertain whether the
of the national government. shipper possessed the required Mayor's Permit issued by this
Office and the shipment is covered by invoice or clearance issued
Sec. 16, LGC - duty of the LGUs to promote the people's right to a by the local office of the Bureau of Fisheries and Aquatic
balanced ecology. Pursuant to this, an LGU, like the City of Davao, Resources and as to compliance with all other existing rules and
can not claim exemption from the coverage of PD 1586. As a regulations on the matter. Subsequently, the Provincial Board of
body politic endowed with governmental functions, an LGU has Palawan issued a similar ordinance.
the duty to ensure the quality of the environment, which is the
very same objective of PD 1586. Petitioners, who were charged with violation of certain provisions
of the foregoing issuances upon the latter’s implementation,
Section 4 of PD 1586 clearly states that "no person, partnership sought relief with the SC contending that (a) the challenged
or corporation shall undertake or operate any such declared ordinances deprived them of due process of law, their livelihood,
environmentally critical project or area without first securing an and unduly restricted them from the practice of their trade, in
Environmental Compliance Certificate issued by the President or violation of constitutional guarantees, and (b) the challenged
his duly authorized representative." 13 The Civil Code defines a office order contained no regulation nor condition under which
person as either natural or juridical. The state and its political the Mayor's permit could be granted or denied, vesting the mayor
subdivisions, i.e., the local government units 14 are juridical absolute authority to determine whether or not to issue the
persons. 15 Undoubtedly therefore, local government units are permit.
not excluded from the coverage of PD 1586.
DECISION: PETITION dismissed. It is of course settled that laws
Note: Based on DENR-Community Environment and Natural (including ordinances enacted by local government units) enjoy
Resources Office (CENRO-West) certification, project area not the presumption of constitutionality. To overthrow this
environmentally critical area. SC is not trier of facts. Proclamation presumption, there must be a clear and unequivocal breach of the
No. 2146 issued on December 14, 1981, lists areas and types of Constitution, not merely a doubtful or argumentative
projects as ECA and within EIS system under PD1586, eg., heavy contradiction. In short, the conflict with the Constitution must be
industries, iron and steel mills, smelting plants, major mining and shown beyond reasonable doubt. Where doubt exists, even if
quarrying projects, etc.) well-founded, there can be no finding of unconstitutionality. To
doubt is to sustain.

Case: RURAL BANK OF MAKATI, INC. vs. MUNICIPALITY OF MAKATI, The right to a balanced and healthful ecology carries with it a
G.R. No. 150763, 7/2/2004 correlative duty to refrain from impairing the environment . . . The
LGC provisions invoked by private respondents merely seek to
FACTS: For non-payment of mayor’s permit fee and annual give flesh and blood to the right of the people to a balanced and
business taxes, criminal charges against certain officers of healthful ecology. In fact, the General Welfare Clause, expressly
Petitioner. Pending these charges, Respondent ordered the mentions this right.
closure of the bank, prompting the latter to pay, under protest
P82,408.66 as mayor’s permit fee and annual business taxes. In light then of the principles of decentralization and devolution
Petitioner filed a civil complaint for sum of money and damages enshrined in the LGC and the powers granted therein to local
against Respondent with RTC alleging that the collection of government units under Section 16 (the General Welfare Clause),
subject fees and closure order were oppressive and arbitrary and under Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a)
which resulted loss of expected earnings. RTC dismissed the (1)(vi), which unquestionably involve the exercise of police power,
complaint, which decision was sustained by the CA holding that the validity of the questioned Ordinances cannot be doubted.
the closure order was a legitimate exercise of police power by
Respondent. Hence, petition with SC. Case: TAN vs. PEREÑA, G.R. No. 149743, 2/18/2005

DECISION: Assailed decision AFFIRMED with modification deleting
closure order. RE (imposition of fees) - Municipal corporations are
agencies of the State for the promotion and maintenance of local
self-government and as such are endowed with police powers in
order to effectively accomplish and carry out the declared objects
of their creation. 20 The authority of a local government unit to
exercise police power under a general welfare clause is not a
recent development. Thus, the closure of the bank was a valid
exercise of police power pursuant to the general welfare clause
contained in and restated by B.P. Blg. 337, which was then the
FACTS: How many cockpits may be allowed to operate in a city or
municipality? Comes into play, the traditional power of the
national government to enact police power measures, on one
hand, and the vague principle of local autonomy now enshrined in
the Constitution on the other. PD449 (Cockfighting Law of 1974)
provided that only one cockpit shall be allowed in each
city/municipality except that in cities or municipalities with a
population of over 100T, two cockpits may be established,
maintained or operated. In 1993, the Municipal Council of
Daanbantaya, Cebu enacted municipal ordiances which

6
eventually allowed the operation of not more than three cockpits (under EO205) has the authority to issue a certificate of authority
in the municipality. In 1995, Petitioner (Leonardo Tan) applied for to operate a CATV system, this does not preclude the city council
a license to operate a cockpit. Respondent (Socorro Perena), who from regulating the operation of such a system in their locality
was an existing licensee, filed a complaint with the RTC to enjoin under the powers conferred by the LGC (of 1983).
Petitioner from operating his cockpit citing that the challenged
ordinance allowing the operation of not more than three cockpits RULING: Petition GRANTED. Significantly, President Marcos and
violated PD449. The trial court dismissed the complaint and President Aquino, in the exercise of their legislative power, issued
upheld Petitioner’s franchise reasoning that, while the ordiance P.D. No. 1512, E.O. No. 546 and E.O. No. 205. Hence, they have
may be in conflict with PD449, any doubt in interpretation should the force and effect of statutes or laws passed by Congress. That
be resolved in favor of the grant of more power to LGUs under the the regulatory power stays with the NTC is also clear from
LGC’s principle of devolution. Court of Appeals reversed the trial President Ramos' E.O. No. 436 mandating that the regulation and
court’s decision. Hence, Petitioner’s appeal to the SC. supervision of the CATV industry shall remain vested "solely" in
the NTC. In light of the above laws and E.O. No. 436, the NTC
RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) of exercises regulatory power over CATV operators to the exclusion
the LGC sufficiently repeals Section 5(b) of the Cockfighting Law, of other bodies.
vesting as it does on LGUs the power and authority to issue
franchises and regulate the operation and establishment of But, lest we be misunderstood, nothing herein should be
cockpits in their respective municipalities, any law to the contrary interpreted as to strip LGUs of their general power to prescribe
notwithstanding. However, while the Local Government Code regulations under the general welfare clause of the Local
expressly repealed several laws, PD449 was not among them. Government Code. It must be emphasized that when E.O. No. 436
Section 534(f) of the LGC declares that all general and special decrees that the "regulatory power" shall be vested "solely" in the
laws or decrees inconsistent with the Code are hereby repealed or NTC, it pertains to the "regulatory power" over those matters
modified accordingly, but such clause is not an express repealing which are peculiarly within the NTC's competence, such as, the:
clause because it fails to identify or designate the acts that are (1) determination of rates, (2) issuance of "certificates of
intended to be repealed. authority, (3) establishment of areas of operation, (4)
examination and assessment of the legal, technical and financial
While the sanggunian retains the power to authorize and license qualifications of applicant operators, (5) granting of permits for
the establishment, operation, and maintenance of cockpits, its the use of frequencies, (6) regulation of ownership and operation,
discretion is limited in that it cannot authorize more than one (7) adjudication of issues arising from its functions, and (8) other
cockpit per city or municipality, unless such cities or similar matters. Within these areas, the NTC reigns supreme as it
municipalities have a population of over one hundred thousand, possesses the exclusive power to regulate — a power comprising
in which case two cockpits may be established. varied acts, such as "to fix, establish, or control; to adjust by rule,
method or established mode; to direct by rule or restriction; or to
Cockfighting Law arises from a valid exercise of police power by subject to governing principles or laws."
the national government. Of course, local governments are
similarly empowered under Section 16 of the Local Government There is no dispute that respondent Sangguniang Panlungsod, like
Code. We do not doubt, however, the ability of the national other local legislative bodies, has been empowered to enact
government to implement police power measures that affect the ordinances and approve resolutions under the general welfare
subjects of municipal government, especially if the subject of clause of B.P. Blg. 337, the Local Government Code of 1983. That
regulation is a condition of universal character irrespective of it continues to posses such power is clear under the new law, R.A.
territorial jurisdictions. Cockfighting is one such condition. It is a No. 7160.
traditionally regulated activity, due to the attendant gambling
involved or maybe even the fact that it essentially consists of two The general welfare clause is the delegation in statutory form of
birds killing each other for public amusement. Laws have been the police power of the State to LGUs. Through this, LGUs may
enacted restricting the days when cockfights could be held, and prescribe regulations to protect the lives, health, and property of
legislation has even been emphatic that cockfights could not be their constituents and maintain peace and order within their
held on holidays celebrating national honor such as Independence respective territorial jurisdictions. Accordingly, we have upheld
Day and Rizal Day. enactments providing, for instance, the regulation of gambling,
the occupation of rig drivers, the installation and operation of
The obvious thrust of our laws designating when cockfights could pinball machines, the maintenance and operation of cockpits, the
be held is to limit cockfighting and imposing the one-cockpit-per- exhumation and transfer of corpses from public burial grounds,
municipality rule is in line with that aim. Cockfighting is a valid and the operation of hotels, motels, and lodging houses as valid
matter of police power regulation, as it is a form of gambling exercises by local legislatures of the police power under the
essentially antagonistic to the aims of enhancing national general welfare clause.
productivity and self-reliance. Limitation on the number of
cockpits in a given municipality is a reasonably necessary means Like any other enterprise, CATV operation maybe regulated by
for the accomplishment of the purpose of controlling cockfighting, LGUs under the general welfare clause. This is primarily because
for clearly more cockpits equals more cockfights. the CATV system commits the indiscretion of crossing public
properties. (It uses public properties in order to reach
A municipal ordinance must not contravene the Constitution or subscribers.) The physical realities of constructing CATV system
any statute, otherwise it is void. Ordinance No. 7 unmistakably — the use of public streets, rights of ways, the founding of
contravenes the Cockfighting Law in allowing three cockpits in structures, and the parceling of large regions — allow an LGU a
Daanbantayan. certain degree of regulation over CATV operators. This is the
same regulation that it exercises over all private enterprises
Case: BATANGAS CATV, INC. vs. CA, G.R. No. 138810, 9/29/2004 within its territory.

In the late 1940s, John Walson, an appliance dealer in
Pennsylvania, suffered a decline in the sale of television (tv) sets
because of poor reception of signals in his community. Troubled,
he built an antenna on top of a nearby mountain. Using coaxial
cable lines, he distributed the tv signals from the antenna to the
homes of his customers. Walson's innovative idea improved his
sales and at the same time gave birth to a new
telecommunication system — the Community Antenna Television
(CATV) or Cable Television. The query in this case is – may a LGU
regulate the subscriber rates charged by CATV operators within
its territorial jurisdiction?
On July 28, 1986, Respondent city council enacted a resolution
granting Petitioner a permit to construct, install, and operate a
CATV system in Batangas City with authority to charge
subscribers the maximum rates specified therein with condition
that rate increases would be subject to council approval. When
Petitioner increased its subscriber rates from P88.00 to P180.00
per month in 1993, Respondent Mayor wrote/threatened
Petitioner with the cancellation of its permit unless it secures the
approval of respondent City Council. Petitioner claiming that,
under EO205, the National Telecommunications Commission has
sole authority to regulate the CATV operation in the Philippines,
Petitioner filed a petition before the RTC to enjoin from enforcing
the questioned ordinance. The trial court granted the injunction
reasoning that the sole agency of the government which can
regulate CATV operation is the NTC, and that the LGUs cannot
exercise regulatory power over it without appropriate legislation.
Trial court’s ruling was reversed by the CA holding that, NTC
But, while we recognize the LGUs' power under the general
welfare clause, we cannot sustain Resolution No. 210. We are
convinced that respondents strayed from the well recognized
limits of its power. The flaws in Resolution No. 210 are: (1) it
violates the mandate of existing laws and (2) it violates the
State's deregulation policy over the CATV industry.
Resolution No. 210 is an enactment of an LGU acting only as
agent of the national legislature. Necessarily, its act must reflect
and conform to the will of its principal. To test its validity, we must
apply the particular requisites of a valid ordinance as laid down
by the accepted principles governing municipal corporations.
The apparent defect in Resolution No. 210 is that it contravenes
E.O. No. 205 and E.O. No. 436 insofar as it permits respondent
Sangguniang Panlungsod to usurp a power exclusively vested in
the NTC, i.e., the power to fix the subscriber rates charged by
CATV operators. As earlier discussed, the fixing of subscriber
rates is definitely one of the matters within the NTC's exclusive
domain.
"The rationale of the requirement that the ordinances should not
contravene a statute is obvious. Municipal governments are only
agents of the national government. Local councils exercise only
delegated legislative powers conferred on them by Congress as
the national lawmaking body. The delegate cannot be superior to
the principal or exercise powers higher than those of the latter. It
is a heresy to suggest that the local government units can undo
the acts of Congress, from which they have derived their power in

7
the first place, and negate by mere ordinance the mandate of the
statute.
OTHER CASES: VELASCO vs. VILLEGAS 120 SCRA 568 – Manilia
ordinance prohibiting barbershops from conducting massage
business in another room was held valid, as it was passed for
protection of public morals.
BALACUIT vs. CFI OF AGUSAN DEL NORTE 163 SCRA 182 -
Ordinance penalizing persons charging full payment for admission
of children ages (ages 7 to 12) in moviehouse was an invalid
exercise of the police power for being unreasonable and
oppressive on business of petitioners.
- Local revenue is generated only from sources
expressly authorized by law or ordinance, collection
thereof shall at all times be acknowledged properly;
- 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;
- Trust funds in local treasury shall not be paid out
except in fulfillment of purpose for which trust was
created or funds received;
- Local budget shall operationalize approved
development plans.

DE LA CRUZ vs. PARAS 123 SCRA 759 – Ordinance of Bocaue, Case: HUMBERTO BASCO vs. PAGCOR, G.R. No. 91649, 5/14/1991
Bulacan prohibiting operation of nightclubs was declared invalid
because it was prohibitory and not merely regulatory in character. Under PD 1869, the Philippine Amusement and Gaming
Corporation (PAGCOR) was empowered to regulate and
Section 17, LGC – Basic Services and Facilities – LGU endeavor to centralized all games of chance authorized by existing franchise
be self-reliant and continue exercise powers and discharge their or permitted by law. Petitioners (as lawyers and taxpayers)
duties and functions currently vested upon them; also discharge challenging the constitutionality of PD1869, alleged that said law
functions and responsibilities of national agencies devlolved to waived Manila City’s right to impose taxes and license fees, which
them pursuant to the LGC; exercise such other powers and by law is recognized and thus, was an intrusion into LGU’s right
discharge other functions as are necessary, appropriate or to impose local taxes and license fees in contravention of the
incidental to efficient and effective provision of basic services and constitutionally enshrined principle of local autonomy.
facilities enumerate in Sec. 17. (see list of basic services and Specifically, the challenged is directed against Section 13 par. (2)
facilities) of P.D. 1869 which exempts PAGCOR, as the franchise holder from
paying any "tax of any kind or form, income or otherwise, as well
Note: Public works and infrastructure projects and other facilities, as fees, charges or levies of whatever nature, whether National or
programs and services funded by national government under GAA Local", except for the 5% franchise tax due to the National
and other laws, not covered by Section 17 except where LGU is Government.
duly designated as the implementing agency for such
project/facilities/programs and services. RULING: Petition DISMISSED. Section 5, Article X of the 1987
Constitution (on Local Autonomy) provides that “each local
government unit shall have the power to create its own source of
Section 18 – Power to Generate & Apply Resources – restates and revenue and to levy taxes, fees, and other charges subject to
implements Section 5, 6 and 7 of Article 10 of the Constitution, such guidelines and limitation as the congress may provide,
but the power is subject to limitations imposed by Congress. consistent with the basic policy on local autonomy. Such taxes,
-includes: fees and charges shall accrue exclusively to the local
government." The power of local government to "impose taxes
1. Establishing an organization responsible for and fees" is always subject to "limitations" which Congress may
efficient and effective implementation of their provide by law. Since PD 1869 remains an "operative" law until
development plans, programs and objective and "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987
priorities; Constitution), its "exemption clause" remains as an exception to
2. 2. Creating their own sources of revenue and to the exercise of the power of local governments to impose taxes
levy taxes, fees and charges which shall accrue and fees. It cannot therefore be violative but rather is consistent
exclusively to their own use and disposition and with the principle of local autonomy. Local governments have no
which shall be retained by them; power to tax instrumentalities of the National Government.
3. Having a just share in national taxes which shall PAGCOR is a government owned or controlled corporation with an
be automatically and directly released to them original charter, PD 1869. All of its shares of stocks are owned by
without need of further action; the National Government. In addition to its corporate powers
4. Having an equitable share in proceeds and from (Sec. 3, Title II, PD 1869) it also exercises regulatory powers, thus
utilization and development of national wealth PAGCOR has a dual role, to operate and to regulate gambling
and resources within their respective casinos. The latter role is governmental, which places it in the
jurisdictions including sharing the same with category of an agency or instrumentality of the Government.
inhabitants by way of direct benefits; Being an instrumentality of the Government, PAGCOR should be
5. To acquire, develop, lease, encumber and and actually is exempt from local taxes. Otherwise, its operation
alienate or otherwise dispose of real or personal might be burdened, impeded or subjected to control by a mere
property held by them in their private capacity Local government. Otherwise, mere creatures of the State can
and apply their resources and assets for defeat National policies thru extermination of what local
productive, developmental or welfare purposes, authorities may perceive to be undesirable activates or enterprise
in exercise or furtherance of their governmental using the power to tax as "a tool for regulation"
or proprietary powers and functions and ensure
thereby their development as self-feliant Case: LUZ YAMANE vs. BA LEPANTO CONDOMINIUM CORP., G.R.
communities and active participants in No. 154993, 10/25/2005
attainment of national goals.
FACST: Respondent, a duly organized condomium corporation
holding title to the common and limited common areas of the BA-
NOTE: Sections 128-383, Book II of LGC provides for detailed Lepanto Condominium, collected regular assessments from its
provisions on Local Taxation and Fiscal Matters. members for operating expenses, capital expenditures on the
common areas, and other special assessments, pursuant to its
NOTE: Section 130, LGC (Fundamental Principles Governing Amended By-Laws.
Exercise of Power to Tax and Generate Revenues by LGUs):
- Taxation shall be uniform in each LGU; Without citing as basis any specific provision of the Revenue Code
- Taxes, fees, charges and imposition shall be of Makati or the Local Government Code, Petitioner (City
equitable and based as far as practicable on Treasurer of Makati City) issued a notice of assessment holding
taxpayer’s ability to pay; levied only for a public Petitioner liable to pay business taxes, fees and charges totaling
purpose; not unjust, excessive, oppressive or P1,601,013.77 for the years 1995 to 1997. Petitioner reasoned
confiscatory; not contrary to law, public policy, that Respondent is engaged in a profit venture as the collection of
national economic policy or in restraint of trade; dues from unit owners was primarily "to sustain and maintain the
- Collection of taxes, fees, charges and other expenses of the common areas, giving full appreciative living
impositions shall in no case be let to any private values for the individual condominium occupants, generating
person; better marketable prices for future sale of their units.
- Revenue collection shall inure solely to the benefit
of, and be subject to the disposition by LGU unless Upon denial of its protest, Respondent filed an appeal with the
specifically provided herein; and Regional Trial Court which appeal was dismissed. On review by
- Each LGU shall, as far as practicable, evolve a the Court of Appeals, the latter reversed the trial court’s decision
progressive system of taxation and declared that the corporation was not liable to pay business
taxes to the City of Makati. Her motion for reconsideration denied,
NOTE: Section 305, LGC (Fundamental Principles Governing Petitioner filed a petition for review with the Supreme Court.
Financial Affairs, Transactions and Operations of LGU):
- No money to be paid out of local treasury except in RULING: Petition DENIED. The power of local government units to
pursuance of an appropriation ordinance or law; impose taxes within its territorial jurisdiction derives from the
- Local government funds and monies shall be spent Constitution itself, which recognizes the power of these units "to
solely for public purposes; create its own sources of revenue and to levy taxes, fees, and

8
charges subject to such guidelines and limitations as the Charter is the proof that MIAA is exempt from real estate tax.
Congress may provide, consistent with the basic policy of local
autonomy." These guidelines and limitations as provided by MIAA petitioned the CA for prohibition and injunction, with prayer
Congress are in main contained in the Local Government Code of for preliminary injunction or temporary restraining order seeking
1991, which provides for comprehensive instances when and how to restrain the City of Parañaque from imposing real estate tax
local government units may impose taxes. The significant on, levying against, and auctioning for public sale the Airport
limitations are enumerated primarily in Section 133 of the Code Lands and Buildings, which petition however was dismissed for
(prohibition on income taxes except when levied on banks and having been filed beyond the 60-day reglementary period. Hence,
other financial institutions). Found in Title I of Book II of the Code this petition for review.
are other taxes imposable by local government units, including
business taxes. Under Section 151 of the Code, cities such as RULING: Petition GRANTED. The Airport Lands and Buildings of
Makati are authorized to levy the same taxes fees and charges as MIAA are EXEMPT from the real estate tax imposed by the City of
provinces and municipalities. Parañaque. All the real estate tax assessments, including the final
notices of real estate tax delinquencies, issued by the City of
Section 143 of the Code specifically enumerates several types of Parañaque on the Airport Lands and Buildings of the Manila
business on which municipalities and cities may impose taxes. International Airport Authority, except for the portions that the
Moreover, the local sanggunian is also authorized to impose taxes Manila International Airport Authority has leased to private
on any other businesses not otherwise specified under Section parties, are declared VOID.
143 which the sanggunian concerned may deem proper to tax.
As a rule, a government-owned or controlled corporation is not
The coverage of business taxation particular to the City of Makati exempt from real estate tax. However, MIAA is not a government-
is provided by the Makati Revenue Code enacted through owned or controlled corporation. A government-owned or
Municipal Ordinance No. 92-072. Article A, Chapter III of said code controlled corporation must be "organized as a stock or non-stock
governs business taxes in Makati, and it is quite specific as to the corporation." MIAA is not organized as a stock or non-stock
particular businesses which are covered by business taxes. The corporation. MIAA is not a stock corporation because it has no
initial inquiry is what provision of the Makati Revenue Code does capital stock divided into shares, has no stockholders or voting
the City Treasurer rely on to make the Corporation liable for shares and its capital is not divided into shares of stock. Neither is
business taxes. it a non-stock corporation because it has no members. A non-
stock corporation must have members. Even if the Government is
As stated earlier, local tax on businesses (that is, "trade or considered as the sole member of MIAA, this will not make MIAA a
commercial activity regularly engaged in as a means of livelihood non-stock corporation because non-stock corporations cannot
or with a view to profit") is authorized under Section 143 of the distribute any part of their income to their members and in
Local Government Code. It is thus imperative that in order that MIAA’s case, Section 11 of its Charter requires it to remit 20% of
Respondent may be subjected to business taxes, its activities its annual gross operating income to the National Treasury, thus,
must fall within the definition of business as provided in the Local preventing MIAA from qualifying as a non-stock corporation.
Government Code. And to hold that they do is to ignore the very Further, non-stock corporations are organized for charitable,
statutory nature of a condominium corporation. religious, educational, professional, cultural, recreational,
fraternal, literary, scientific, social, civil service, or similar
The creation of the condominium corporation is sanctioned by RA purposes, like trade, industry, agriculture and like chambers.
No. 4726, (Condominium Act - a condominium is an interest in MIAA is not organized for any of these purposes. MIAA, a public
real property consisting of a separate interest in a unit in a utility, is organized to operate an international and domestic
residential, industrial or commercial building and an undivided airport for public use.
interest in common, directly or indirectly, in the land on which it is
located and in other common areas of the building). In line with MIAA is a government instrumentality vested with corporate
the authority of the condominium corporation to manage the powers to perform efficiently its governmental functions. MIAA is
condominium project, it may be authorized, in the deed of like any other government instrumentality, the only difference is
restrictions, "to make reasonable assessments to meet authorized that MIAA is vested with corporate powers. When the law vests in
expenditures, each condominium unit to be assessed separately a government instrumentality corporate powers, the
for its share of such expenses in proportion (unless otherwise instrumentality does not become a corporation, unless the
provided) to its owner's fractional interest in any common areas." government instrumentality is organized as a stock or non-stock
The collection of these assessments from unit owners is the basis corporation. Thus, MIAA exercises the governmental powers of
for the City Treasurer's claim that the Corporation is doing eminent domain, police authority and the levying of fees and
business as these collections are "with the end view of getting full charges. At the same time, MIAA exercises "all the powers of a
appreciative living values" for the condominium units, and as a corporation under the Corporation Law, insofar as these powers
result, profit is obtained once these units are sold at higher are not inconsistent with the provisions of this Executive Order."
prices. The Court cites with approval the two counterpoints raised
by the Court of Appeals in rejecting this contention. First, if any A government instrumentality like MIAA falls under Section 133(o)
profit is obtained by the sale of the units, it accrues not to the of the Local Government Code, which states that, unless
corporation but to the unit owner. Second, if the unit owner does otherwise provided by the Code, the exercise of the taxing
obtain profit from the sale of his unit, he is already required to powers of provinces, cities, municipalities, and barangays shall
pay capital gains tax on the appreciated value of the not extend to the levy of taxes, fees or charges of any kind on the
condominium unit. National Government, its agencies and instrumentalities and local
government units.
Case: MIAA vs. CA, G.R. No. 155650. 7/20/2006
Section 133(o) recognizes the basic principle that local
FACTS: Petitioner Manila International Airport Authority operates governments cannot tax the national government, which
the Ninoy Aquino International Airport (NAIA) Complex in historically merely delegated to local governments the power to
Parañaque City under Executive Order No. 903, otherwise known tax. While the 1987 Constitution now includes taxation as one of
as the Revised Charter of the Manila International Airport the powers of local governments, local governments may only
Authority. Subsequently, Executive Order Nos. 909 and 298 exercise such power "subject to such guidelines and limitations as
amended the MIAA Charter, where as operator of the the Congress may provide."
international airport, MIAA administers the land, improvements
and equipment within the NAIA Complex. The MIAA Charter When local governments invoke the power to tax on national
transferred to MIAA approximately 600 hectares of land, 3 government instrumentalities, such power is construed strictly
including the runways and buildings then under the Bureau of Air against local governments. The rule is that a tax is never
Transportation. presumed and there must be clear language in the law imposing
the tax. Any doubt whether a person, article or activity is taxable
After, the Office of the Government Corporate Counsel (OGCC) is resolved against taxation. This rule applies with greater force
issued Opinion No. 061 stating that the Local Government Code of when local governments seek to tax national government
1991 withdrew the exemption from real estate tax granted to instrumentalities.
MIAA under Section 21 of the MIAA Charter, MIAA negotiated with
Respondent City of Parañaque to pay the real estate tax imposed The Airport Lands and Buildings of MIAA are property of public
by the City and paid some of said taxes already due. Later, MIAA dominion and therefore owned by the State or the Republic of the
received Final Notices of Real Estate Tax Delinquency (totaling Philippines. Properties of public dominion mentioned in Article
P624,506,725.42) from the City of Parañaque for the taxable 420 of the Civil Code, like "roads, canals, rivers, torrents, ports
years 1992 to 2001. and bridges constructed by the State," are owned by the State.
The term "ports" includes seaports and airports. The MIAA Airport
When Parañaque City issued notices of levy and warrants of levy Lands and Buildings constitute a "port" constructed by the State.
on the Airport Lands and Buildings and threatened to sell at The Airport Lands and Buildings are devoted to public use
public auction these properties if MIAA failed to pay the real because they are used by the public for international and
estate tax delinquency, MIAA sought clarification of OGCC Opinion domestic travel and transportation. The fact that the MIAA
No. 061. The OGCC then issued Opinion No. 147 clarifying OGCC collects terminal fees and other charges from the public does not
Opinion No. 061 stating that Section 206 of the Local Government remove the character of the Airport Lands and Buildings as
Code requires persons exempt from real estate tax to show proof properties for public use. The charging of fees to the public does
of exemption and that in the case of MIAA, Section 21 of the MIAA not determine the character of the property whether it is of public

9
dominion or not. Article 420 of the Civil Code defines property of municipal government allow, provide for additional allowances
public dominion as one "intended for public use." and other benefits to judges, prosecutors, public elementary and
high school teachers, and other national government officials
As properties of public dominion, the airport properties are stationed in or assigned to the municipality;
outside the commerce of man. Properties of public dominion,
being for public use, are not subject to levy, encumbrance or The controversy actually centers on the seemingly sweeping
disposition through public or private sale. Any encumbrance, levy provision in NCC No. 67 which states that "no one shall be
on execution or auction sale of any property of public dominion is allowed to collect RATA from more than one source." Does this
void for being contrary to public policy. Essential public services mean that judges cannot receive allowances from LGUs in
will stop if properties of public dominion are subject to addition to the RATA from the Supreme Court? By no stretch of
encumbrances, foreclosures and auction sale. This will happen if the imagination can NCC No. 67 be construed as nullifying the
the City of Parañaque can foreclose and compel the auction sale power of LGUs to grant allowances to judges under the Local
of the 600-hectare runway of the MIAA for non-payment of real Government Code of 1991. It was issued primarily to make the
estate tax. grant of RATA to national officials under the national budget
uniform. In other words, it applies only to the national funds
Case: SMART COMMUNICATIONS, INC. vs. CITY OF DAVAO, G.R. No. administered by the DBM, not the local funds of LGUs.
155491, 9/16/2008
To rule against the power of LGUs to grant allowances to judges
FACTS: The Tax Code of Davao City ISec. 1, Art. 10 thereof) as what respondent COA would like us to do will subvert the
provided that: “Notwithstanding any exemption granted by any principle of local autonomy zealously guaranteed by the
law or other special law, there is hereby imposed a tax on Constitution. The Local Government Code of 1991 was specially
businesses enjoying a franchise, at a rate of seventy-five percent promulgated by Congress to ensure the autonomy of local
(75%) of one percent (1%) of the gross annual receipts for the governments as mandated by the Constitution. By upholding, in
preceding calendar year based on the income or receipts realized the present case, the power of LGUs to grant allowances to
within the territorial jurisdiction of Davao City. judges and leaving to their discretion the amount of allowances
they may want to grant, depending on the availability of local
RULING: Smart is of the view that the only taxes it may be made funds, we ensure the genuine and meaningful local autonomy of
to bear under its franchise are the national franchise tax (now LGUs.
VAT), income tax, and real property tax. It claims exemption from
the local franchise tax because the “in lieu of taxes” clause in its
franchise does not distinguish between national and local taxes. Section 19,LGC – LGU’s Power of Eminent Domain – LGU through
We pay heed that R.A. No. 7294 is not definite in granting its Chief Executive acting pursuant to an ordinance; for public use
exemption to Smart from local taxation. Section 9 of R.A. No. or purpose or welfare for the benefit of poor and landless; upon
7294 imposes on Smart a franchise tax equivalent to three payment of just compensation, pursuant to provisions of the
percent (3%) of all gross receipts of the business transacted Constitution and pertinent laws.
under the franchise and the said percentage shall be in lieu of all
taxes on the franchise or earnings thereof. R.A. No 7294 does not Conditions for Exercise of Power of Eminent Domain: (i) Prior valid
expressly provide what kind of taxes Smart is exempted from. It is and definite offer to owner which latter did not accept; (II) LGU
not clear whether the “in lieu of all taxes” provision in the may take immediate possession of property upon filing of
franchise of Smart would include exemption from local or national expropriation proceedings (Rule 67 of Rules of Court) and
taxation. What is clear is that Smart shall pay franchise tax payment of deposit of at least 15% of fair market value of
equivalent to three percent (3%) of all gross receipts of the property based on current tax declaration; amount to be paid for
business transacted under its franchise. But whether the expropriation shall be determined by proper court (reference to
franchise tax exemption would include exemption from exactions Commissioner) based on fair market value at the time of taking.
by both the local and the national government is not unequivocal.
- Eminent Domain – inherent attribute of sovereignty to take
The uncertainty in the “in lieu of all taxes” clause in R.A. No. 7294 private property upon payment of just compensation.
on whether Smart is exempted from both local and national
franchise tax must be construed strictly against Smart which Case: MUN. OF PARANAQUE vs. V.M. REALTY CORP. 292 SCRA 678
claims the exemption. Smart has the burden of proving that,
aside from the imposed 3% franchise tax, Congress intended it to FACTS: A resolution passed by Municipal Council authorized Chief
be exempt from all kinds of franchise taxes – whether local or Executive to exercise police power.
national. However, Smart failed in this regard.
RULING: LGC in effect when complaint for expropriation was filed,
Tax exemptions are never presumed and are strictly construed explicitly requires an ordinance for this purpose. If Congress
against the taxpayer and liberally in favor of the taxing authority. intended to allow LGU to exercise eminent domain through MERE
[22] They can only be given force when the grant is clear and resolution, it would have simply adopted the language of the
categorical. The surrender of the power to tax, when claimed, previous local government code (BP 337 of 1983). Where the law
must be clearly shown by a language that will admit of no is clear and ambiguous, the law is applied according to the
reasonable construction consistent with the reservation of the express terms. Eminent Domain necessarily involves a derogation
power. If the intention of the legislature is open to doubt, then the of a fundamental or private right of the people, hence, manifest
intention of the legislature must be resolved in favor of the State. change in legislative language from “resolution” under BP337 to
“ordinance” under RA7160 demands strict interpretation.
In this case, the doubt must be resolved in favor of the City of Petitioner relies on Art. 36 of Rule VI of the Implementing Rules
Davao. The “in lieu of all taxes” clause applies only to national which requires only a “resolution” to authorize the LGU to
internal revenue taxes and not to local taxes. exercise eminent domain. This is clearly misplaced. Section 19 of
the LGC, the law itself, surely prevails over said rule which merely
[T]he "in lieu of all taxes" clause in Smart's franchise refers only seeks to implement it. The clear letter of the law is controlling
to taxes, other than income tax, imposed under the National and cannot be amended by mere administrative rule issued for its
Internal Revenue Code. The "in lieu of all taxes" clause does not implementation.
apply to local taxes. The clear intent is for the "in lieu of all taxes"
clause to apply only to taxes under the National Internal Revenue Note: Resolution is a mere declaration of sentiment/opinion of
Code and not to local taxes. Even with respect to national internal lawmaking body on a specific matter; it is temporary in nature;
revenue taxes, the "in lieu of all taxes" clause does not apply to third reading not necessary unless decided otherwise by majority
income tax. of all sangguniang members. Ordinance on the otherhand, is law
and is of general and permanent character and requires 3
Case: JUDGE TOMAS C. LEYNES vs. COA, G.R. No. 143596, readings.
12/11/2003
Case: AMOS FRANCIA, vs. MUN. OF MEYCAUAYAN, G.R. No.
FACT: Petitioner was formerly receiving a P1600-monthly 170432, 3/24/2008
allowance from the Municipality of Naujan while he was stationed
there as judge of the municipal trial court. Respondent FACTS: Respondent filed a complaint to expropriate Petitioners’
Commission on Audit (upholding the Regional Director and 16,256 sq. m. idle property which it planned to use as a common
Provincial Auditor) disallowed said allowance citing that the latter public terminal for all types of public utility vehicles with a
along with Petitioner’s RATA from the Supreme Court violated weighing scale for heavy trucks. In their answer, Petitioners
certain budget circulars (NCC#67) that no one shall be allowed to averred that the subject land was developed contrary to
collect RATA from more than one source. Respondent’s claim of being raw land, for which reason,
Respondent’s offer price of 333,500 (or P111.99 per square
RULING: On October 10, 1991, Congress enacted RA 7160, (Local meter) was too low. Petitioners essentially aver that the CA erred
Government Code of 1991). The power of the LGUs to grant in upholding the RTC's order that, in expropriation cases, prior
allowances and other benefits to judges and other national determination of the existence of a public purpose was not
officials stationed in their respective territories was expressly necessary for the issuance of a writ of possession.
provided in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi)
of the Code. Section 447(a)(1)(xi) of RA 7160, the Local RULING: Petitioner DENIED. Sec. 19, LGC provides that, a LGU
Government Code of 1991, provides: “When the finances of the may, through its chief executive and acting pursuant to an

10
ordinance, exercise the power of eminent domain for public use, portion to Shell Corporation. Petitioner Favis protested the lease
or purpose, or welfare for the benefit of the poor and the landless, to Shell claiming that said lease diminished the width of Lapu-
upon payment of just compensation, pursuant to the provisions of Lapu Street and that the City was bereft of authority to lease any
the Constitution and pertinent laws. Before a LGU may enter into portion of its public streets in favor of anyone. Subsequently,
possession of the property sought to be expropriated, it must (1) Petitioner filed a complaint for annulment of the lease with
file a complaint for expropriation sufficient in form and substance damages in the Court of First Instance of Baguio. The latter court
in the proper court and (2) deposit with the said court at least dismissed his complaint. Hence, appeal to the Supreme Court.
15% of the property's fair market value based on its current tax
declaration. The law does not make the determination of a public RULING: APPEAL Denied. Appellant may not challenge the city
purpose a condition precedent to the issuance of a writ of council's act of withdrawing a strip of Lapu-Lapu Street at its dead
possession. end from public use and converting the remainder thereof into an
alley. These are acts well within the ambit of the power to close a
city street. The city council is the authority competent to
Section 20, LGC – LGU Power to Reclassify Land – City or determine if a certain property is still necessary for public use.
Municipality through ordinance passed after conducting public This power is discretionary and will not ordinarily be controlled or
hearings for that purpose, may authorize the reclassification of interfered with by the courts, absent a plain case of abuse or
agricultural lands and provide for the manner of their utilization fraud or collusion. Faithfulness to the public trust will be
or disposition. presumed. The fact that some private interests may be served
incidentally will not invalidate the vacation ordinance.
Agricultural Land, defined: Those public lands acquired from
Spain which are not timber or mineral land; land devoted to Given the precept that the discretion of a municipal corporation is
agriculture or to any growth. broad in scope and should thus be accorded great deference in
the spirit of the Local Autonomy Law (R.A. 2264), and absent a
Grounds for Reclassification: (i) When land ceases to be clear abuse of discretion, we hold that the withdrawal for lease of
economically feasible and sound for agricultural purposes as the disputed portion of Lapu-Lapu Street and the conversion of
determined by the Dept. of Agriculture; and (ii) when land shall the remainder of the dead-end part thereof into an alley, does not
have substantially greater economic value for residential, call for, and is beyond the reach of, judicial interference.
commercial or industrial purposes as determined by the
Sanggunian; From the fact that the leased strip of 100 square meters was
withdrawn from public use, it necessarily follows that such leased
Conditions for Reclassification: Percentage limits, that is, of the portion becomes patrimonial property. Article 422 of the Civil
total agricultural area at the time of passage of reclassification – Code indeed provides that property of public domain, "when no
(a) for highly urbanized cities and independent component cities – longer intended for public use or public service, shall form part of
15%; (b) for component cities and 1st to 3rd class municipalities – the patrimonial property of the State." Authority is not wanting for
10%; and (c) for 4th to 6th class municipalities – 5% the proposition that "[property for public use of provinces and
towns are governed by the same principles as property of public
Note: President (upon Nat’l Economic Dev’t Authority’s dominion of the same character." There is no doubt that the strip
recommendation), when public interest so requires, authorize a withdrawn from public use and held in private ownership may be
city or municipality to reclassify lands in excess of limits set in given in lease.
Section 20(a).
The general rule is, one whose property does not abut on the
- Under Sec. 20(e) – Agricultural lands distributed to agrarian closed section of a street has no right to compensation for the
reform beneficiaries pursuant to RA6657(CARL), shall not be closing or vacation of the street, if he still has reasonable access
affected by the reclassification and the conversion of such lands to the general system of streets. The circumstances in some
into other purposes shall be governed by Sec. 65 of CARL. cases may be such as to give a right to damages to a property
owner, even though his property does not abut on the closed
Note: Sec. 65 of RA6657 – Conditions for conversion of section. But to warrant recovery in any such case the property
agricultural lands held by agrarian reform program beneficiaries owner must show that the situation is such that he has sustained
to non-agricultural use with DAR: (a) 5 year lapse from award of special damages differing in kind, and not merely in degree, from
land; (ii) land ceased to be economically feasible and sound for those sustained by the public generally."
agricultural purpose; (iii) notice to affected parties; (iv)
beneficiary has fully paid his obligation. In the case at bar, no private right of appellant has been invaded.
No special damage or damages he will incur by reason of the
Section 21, LGC – Closure & Opening of Roads – The closure of closing of a portion of Lapu-Lapu Street at its dead end. His
streets/roads is within the power of the local government unit property does not abut that street. In fact, the court has found
(through council by way of ordinance). that the remaining portion of Lapu-Lapu Street, which actually is
4 meters in width, is sufficient for the needs of appellant and that
- LGU (by ordinance) – may permanently/temporarily close or the leased portion — subject of this suit — "was not necessary for
open any local road, alley, park or square falling within its public use."
jurisdiction.
"The Constitution does not undertake to guarantee to a property
Note: In case of permanent closure, ordinance must be approved owner the public maintenance of the most convenient route to his
by, at least 2/3 of all members of the sanggunian and when door. The law will not permit him to be cut off from the public
necessary, an adequate substitute for the public facility subject of thoroughfares, but he must content himself with such route for
closure, is provided. outlet as the regularly constituted public authority may deem
most compatible with the public welfare. When he acquires city
- Property publicly withdrawn from public use may be property, he does so in tacit recognition of these principles. If,
used/conveyed for any purpose for which other real property subsequent to his appreciation, the city authorities abandon a
belonging to the LGU concerned may be lawfully used or portion of the street to which his property is not immediately
conveyed. adjacent, he may suffer loss because of the inconvenience
imposed, but the public treasury cannot be required to
Note: No freedom park shall be closed permanently without recompense him. Such case is damnum absque injuria."
provision for its transfer/relocation to a new site. (see related
B.P.880 Public Assembly Act).
Case: COACO, INC. vs. HON. PASCUAL A. BERCILLES, G.R. No. L-
- LGU has the power to close local and even national roads (Note: 40474, 8/29/1975
LGU has no authority to order permanent closure/opening of a
national road, alley, park or square, such authority applies to local FACTS: Petitioner Cebu Oxygen & Acytelene Co., Inc. applied for
roads only, see sec. 2[a]). registration of title over a portion of M. Gorces Street in Mabolo,
Cebu City. Said portion was declared an abandoned road by the
Conditions for temporary closure of national/local roads under City Council of Cebu the same not being included in the Cebu
Sec. 2[c]: (i) occasion of actual emergency, fiesta celebrations, Development Plan, and later, by authority of the City Council, was
public rallies, agricultural or industrial fairs, or undertaking of sold by the Acting Mayor to petitioner who was the highest bidder
public works and highways (eg. Banilad flyover); (ii) written order at a public bidding. On motion by the Assistant Provincial Fiscal
for temporary closure by local chief executive; (iii) no national or (alleging that the subject property being a public road intended
local road, alley, park or square shall be temporarily closed for for a public use, it is part of the public domain, outside the
athletic, cultural or civic activity not officially sponsored, commerce of men, and cannot be subject to registration by any
recognized or approved by local LGU concerned. private individual), the trial court dismissed Petitioner’s
application.
Case: ANTONIO FAVIS vs. THE CITY OF BAGUIO, G.R. No. L-29910,
4/25/1969 RULING: PETITION is granted. Order of dismissal set aside and
trial court ordered to proceed with the hearing of the petitioner's
FACTS: A resolution passed by the city council closed the dead- application for registration of title.
end portion of Lapu-lapu Street to public use. By subsequent Under the Cebu City Charter, the City Council is empowered to
resolution, the Mayor as authorized therein, leased the closed close a city road or a street and further, use or convey property

11
thus withdrawn from public servitude for any purpose for which
other real property belonging to the City may be lawfully used or Case: MUNICIPALITY OF PILILIA vs. CA 233 SCRA 484 –
conveyed. Municipality cannot be represented by a private lawyer. Only
provincial fiscal or municipal attorney can represent a province or
In the case of Favis vs. City of Baguio, the Court upholding the municipality in lawsuits. This is mandatory. The municipality’s
power of the city council to close city streets and to vacate or authority to employ a private lawyer is limited to situations where
withdraw the same from public use was similarly assailed, the provincial fiscal is disqualified to present it which
declared that the city council is the authority competent to disqualification must appear on record. Fiscal’s refusal to
determine whether or not a certain property is still necessary for represent the municipality is not legal justification for employing
public use. This power to vacate a street or alley is discretionary, the services of private counsel, Municipality should request the
and will not ordinarily be controlled or interfered with by the Secretary of Justice to appoint an acting provincial fiscal in place
courts, absent a plain case of abuse or fraud or collusion. of the one who declined to handle it.
Faithfulness to the public trust will be presumed.
Case: RAMOS vs. CA 269 SCRA 34 –Petitioners Ramos and Baliuag
Since that portion of the city street subject of petitioner's Market Vendors’ Association filed a petition to declare certain
application for registration of title was withdrawn from public use, ordinances illegal. In said suit, Petitioners challenged the
it follows that such withdrawn portion becomes patrimonial appearance of a private lawyer for the municipality. SC held, Only
property which can be the object of an ordinary contract provincial fiscal, under (Sec. 1683 of Revised Admin Code)
consisting with Article 422 of the Civil Code (that property of provincial attorney or municipal attorney may validly represent
public dominion, when no longer intended for public use or for the municipality. The legality of the representation of an
public service, shall form part of the patrimonial property of the unauthorized counsel may be raised at any stage of the
State). proceedings.

Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000 RE: POWER TO ACQUIRE/CONVEY REAL OR PERSONAL PROPERTY
– LGU may acquire real/personal, tangible or intangible in any
FACTS: Petitioner issued an order to open to public traffic Neptune manner allowed by law, eg., sale or donation, etc.
Street (and to demolition its perimeter fence) – a private road
owned by Respondent. Case: VILLANUEVA vs. CASTANEDA 454 SCRA 142 – Public plaza is
beyond the commerce of man and cannot be the subject of a
RULING: Petition DENIED. While we hold that the general welfare lease or other contractual undertaking, and even assuming the
should be promoted, we stress that it should not be achieved at existence of a valid lease of the public plaza or part thereof, the
the expense of the rule of law. It is thus beyond doubt that the municipal resolution effectively terminated the agreement, for it
MMDA is not a local government unit or a public corporation is settled that the police power cannot be surrendered or
endowed with legislative power. It is not even a "special bargained away through the medium of a contract.
metropolitan political subdivision" as contemplated in Section 11,
Article X of the Constitution. The powers of the MMDA are limited RE: POWER TO ENTER INTO CONTRACTS – requires: (i) LGU has
to formulation, coordination, regulation, implementation, express/implied or inherent power to enter into the particular
preparation, management, monitoring, setting of policies, contract (refer to LGC, special laws or charter); (ii) contract is
installation of a system and administration. It is the local entered into by the proper department, board, committee, officer
government units, acting through their respective legislative or agent (under LGC, generally such authority is with the Local
councils that possess legislative power and police power. In the Chief Executive upon prior authorization by sanggunian); (iii)
case at bar, the Sangguniang Panlungsod of Makati City did not contract must comply with certain substantive requirements, eg.,
pass any ordinance or resolution ordering the opening of Neptune when expenditure of public funds is to be made, there must be
Street, hence, its proposed opening by Petitioner is illegal. actual appropriation and certificate of availability of funds; (iv)
contract must comply with formal requirements of written
NOTE: Closure of Roads is not expropriation where the property contracts, eg. Statutes of fraud.
owner is entitled to just compensation. Construction of new road
was undertaken under the General Welfare Clause (police power), NOTE: A contract entered into without complying with (i) and (iii)
that is, for enjoyment of convenience, every individual must be above is ULTRA VIRES, ergo, NULL AND VOID. Such contract
prepared to give his share. cannot be ratified or validated. Ratification of defective contracts
is possible only when there is non-compliance with (ii) and (iv)
Section 22, LGC – Corporate Powers – As a body corporate, has requirements.
the following powers;
(a) To continuous succession in its corporate name; Case: CITY OF QUEZON vs. LEXBER, INC., G.R. 141616, 3/15/01 –
(b) To sue and be sued;
(c) To have and use a corporate seal; FACTS; Before the effectivity of the LGC in 1991, a tri-partite
(d) To acquire and convey real or personal property; agreement was signed by Lexber, Quezon City and the
(e) To enter into contracts; such other powers as are Municipality of Antipolo whereby, with the conformity of Antipolo,
granted corporation subject to limits provided in Quezon City would lease and use the private land owned by
LGC and other laws. Lexber as a dumpsite situated in Antipolo in exchange for
exclusive services and equipment for landfill to be provided
Corporate Powers, defined: Corporation’s capacity/right to do Lexber. From 1991-1992, Quezon City used the site for dumping
certain acts or engage in certain activities such as sue/be sued but suddenly stopped without any explanation. Lexber sent a
enter into contracts, borrow money and do suc other things demand letter claiming that it was still entitled to compensation
necessary to obtain its purposes. pursuant to the agreement but Mayor Mel Mathay of Quezon City
refused citing that the contract was void having been signed by
NOTE: Local Chief Executive enters into contracts in behalf of then Mayor Simon without the approval or ratification by City
LGU, requires prior authorization by sangguniang concerned Council and that there was no budget appropriation. Collection
UNLESS otherwise provided in the LGC. suit was filed by Lexber. RTC ruled in the latter’s favor and which
decision was affirmed by the CA.
NOTE: Legible copy of contract to be posted in conspicuous place
in provincial capitol/city/municipality/barangay hall (for RULING: Petition DENIED. In the case at bar, the contract requires
Transparency). P94M for a 5-year period. Quezon City invoked PD1445 (Auditing
Code of the Philippines) that contracts involving expenditure of
NOTE: Full autonomy in exercise of corporate powers (not acting public funds can only be entered into when there is an
as agent of the State), and limited only by LGC and other appropriation thereof to be certified by proper accounting
applicable laws. official/agent that funds have been appropriated for that purpose.
Also, Quezon City cited the LGC empowering the sanggunian with
RE: RIGHT TO SUE/BE SUED – Case: CITY COUNCIL OF CEBU vs. authority to appropriate funds for expenses of the city
CUIZON 47 SCRA 325 government. PD1445 does not provide that the absence of
appropriation law ipso facto makes a contract entered into by the
FACTS: For lack of prior authority from the Council, the latter filed LGU null and void. Under the LGC (1973), the power of a mayor to
with CFI-Cebu, a complaint to nullify the contract between Mayor enter contract is not subject to prior authorization by the council.
Cuizon and Tropical Commercial Co., Inc. involving the purchase
of road construction equipments for $520,912.00 cash from Case: MANANTAN vs. MUNICIPLAITY OF LUNA (LA UNION) 82 Phil
Tropical. Complaint was dismissed for lack of legal capacity as 844 – Contract of lease granting fishing privileges is a valid and
trial court reasoned that there is no provision of law authorizing binding contract and cannot be impaired by a subsequent
city council to sue in behalf of the city and that the authorized resolution setting it aside and granting the privilege to another
representative under the LGC is the city mayor for that purpose. (unless the subsequent resolution is a police power measure
because the exercise of the latter prevails over the non-
RULING: Generally, suit is commenced by the local executive impairment clause.
upon authority of the sanggunian, except where the city
councilors themselves and as representatives of/in behalf of the Section 23, LGC – Grants and Donations – sets forth the rules on
city, bring the action to prevent unlawful disbursement of city grants and donations to LGUs from local and foreign assistance
funds. agencies) which local chief executive may “upon authority of the

12
sanggunian” negotiate and secure in order to “support the basic fails or neglects to perform their duties, the former may take such
services or facilities enumerated in Sec. 17. steps/action as prescribed by law to make them perform their
duties. Supervision does not mean control. Control includes the
- No need of securing clearance/approval for grant/donation from power to alter/modify/set aside acts of a subordinate officer.
any department, agency or office of the national government or
from any higher LGU. Note: National agencies/offices with project implementation
function shall coordinate with each other and with LGU concerned
- Projects financed by such grants/assistance with national in the discharge of these functions to ensure participation of LGU
security implications shall be approved by the national agency both in the planning and implementation of said national projects.
concerned. Failure of such agency to act on request within 30
days from receipt thereof, it is deemed approved. Note: National agencies may be directed by the President, upon
LGU’s request, to provide financial, technical or other forms of
- Local Chief shall, within 30 days, upon signing of such grant, assistance to LGU without extra cost to LGU.
agreement or deed of donation, report the nature, amount, terms
of such assistance to both Houses of Congress and the President. Note: National agencies (including GOCCs) with field
offices/branches in province/city/municipality to furnish local chief
Section 24, LGC – Municipal Liability – Rule: LGU and their officials executive concerned, for his information and guidance, monthly
are not exempt from liability for death or injury to reports including duly certified budgetary allocations and
persons/damage to property. expenditures.

Damages – in legal contemplation refers to the sum of money Case: RODOLFO GANZON vs. CA, G.R. No. 93252, 8/5/1991
which law awards or imposes as pecuniary compensation,
recompense or satisfaction for an injury done or a wrong FACTS: Petitioner, Mayor of Iloilo City and a member of the
sustained as a consequence either of a breach of contractual Sangguniang Panglungsod thereof, respectively, were charged
obligation or a tortuous act. It includes all kinds of damages administratively on various charges, among them, abuse of
contemplated in the Civil Code; it is awarded to one as a authority, oppression, grave misconduct, disgraceful and immoral
vindication of the wrongful invasion of his rights. conduct, intimidation, culpable violation of the Constitution, and
arbitrary detention. Hearing on the charges ensued and the
Case: CORREA vs. CFI of BULACAN 92 SCRA 312 – Municipal Respondent DILG, upon finding of probable cause and reasons,
corporation is responsible only for acts of its officers only when issued successive preventive suspension orders against Petitioner
they have acted by authority of law and in conformity with Mayor. Before the SC, Petitioners’ primary argument is that the
requirements. A public officer who commits a tort or wrongful act, DILG Secretary (as President’s alter ego) is devoid, in any event,
done in excess or beyond the scope of his duty, is not protected of any authority to suspend and remove local officials.
by his office and is personally liable therefor like any private
individual. RULING: Since local governments remain accountable to the
national authority, the latter may, by law, and in the manner set
Case” PILAR vs. SANGGUNIANG BAYAN OF DANSOL, PANGASINAN forth therein, impose disciplinary action against local officials. In
128 SCRA 173 – Municipal mayor is personally liable for damages the case at bar, the DILG Secretary, the President’s alter ego, in
(moral and exemplary) and attorney’s fees for having vetoed in consonance with the specific provisions of BP337 (the existing
bad faith, resolution appropriating funds for salary of the vice- Local Gov’t Code) can suspend Petitioners.
mayor.
Supervision is not incompatible with disciplinary authority. As this
Case: MENDOZA vs DE LEON 33 PHIL 508 – Operation of ferry Court held in Ganzon vs. Cayanan, 104 Phil 484, “in
service is a proprietary function. Municipality is negligent and administrative law, supervision means overseeing or the power or
therefore liable for having awarded franchise to operate ferry authority of an officer to see that subordinate officers perform
service to another notwithstanding previous grant of franchise to their duties. If the latter fail or neglect to fulfill them the former
the plaintiff. may take such action or step as prescribed by law to make them
perform their duties”.
Case: MUNICIPALITY OF JAASAN, MISAMIS ORIENTAL vs.
GENTALLAN, G.R. 154961, 5/9/2005 – There being no malice or While the respondent Secretary, as President’s alter ego, under
bad faith in the illegal dismissal and refusal to reinstate the existing Local Gov’t Code, has the power to suspend the
respondent Gentallan by her superior officers, the latter cannot petitioner, such power cannot be exercised oppressively. Ten
be held personally liable for her back salaries. Municipal administrative cases have been successively filed against the city
government, ergo, should disburse funds to answer for her mayor. The latter has been made to serve a total of 120 days of
claims. suspension for the first two cases and the respondent Secretary
has issued another order preventively suspending the former for
NOTE: Liability for contracts – Rule: LGU, like ordinary person is antoehr 60 days, the third time in twenty months. We are
liable on a contract it enters, provided that contract is ultra vires. allowing the mayor to suffer the duration of his third suspension.
Otherwise, become personal liability of the officer who acted Insofar as the remaining charges are concerned, we are urging
beyond his power. the DILG, upon finality of this decision to undertake steps to
expedite the same, subject to the mayor’s usual remedies of
See Articles 2189, 2180 and 34 of the Civil Code on provisions on appeal, judicial or administrative or certiorari, if warranted and
liability. meanwhile, we are precluding the Secretary from meting out
further suspensions based on those remaining complaints,
NOTE: As to tort liability: LGU is not liable if engaged in notwithstanding findings of prima facie evidence.
governmental function but liable if engaged in proprietary
function. Section 26, LGC – National agency/GOCC (in
planning/implementation) of a project/program have DUTY TO
INTERGOVERNMENTAL RELATIONS CONSULT LGU on objectives/goals, impact to the people in terms
of environmental/ecological balance and measures to
– as a body political and corporate (to serve its constituents) prevent/minimize adverse effects.

NATIONAL GOVERNMENT – LGU RELATIONS: NOTE: Project/Program intended may cause pollution, climactic
change, depletion of non-renewable resources, loss of cropland,
Section 25, LGC – National supervision over LGU – despite the rangeland, forest cover or extinction of animal or plant species.
unitary and centralized Phil. Governmental structure, 1987
Constitution limits the authority of the President over LGU only to Section 27, LGC – (read alongside Sec. 2 © and Sec. 26) - Prior
GENERAL SUPERVISION. consultation with LGU (plus prior approval by sanggunian) is
indispensable for implementation of program/project.
President’s General Supervision –
(i) directs over provinces, highly urbanized NOTE: If project results in eviction, appropriate relocation sites to
cities and independent component cities, be provided.
(through provinces over) component cities
and municipalities; and (through cities and See: REPUBLIC vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002;
municipalities over) barangays; LINA VS. PANO 364 SCRA 76
(ii) to ensure that acts of LGU are within the
scope of their prescribed powers and
functions; LGU – PNP RELATIONS:
(iii) Article X, Section 16 of 1987 Constitution –
President shall exercise general supervision Section 28, LGC – LGU Power of Operational Supervision and
over authonmous regions to ensure that Control over PNP –
laws are faithfully executed. as as provided under RA 6975 (DILG Act of 1990) amended by RA
8551 (PNP Reorganization Act of 1991). These laws govern the
Supervision defined – means overseeing or power/authority of an extent of operational supervision and control of local chief
office to see that subordinate performs their duties. If the latter executive over police force, fire protection unit and jail

13
management assigned in their respective jurisdiction. Section 60 – Bureau of Jail Management and Penology –
supervision and control over all city and municipal jails. Provincial
NOTE: Governors and mayors, upon having been elected and jails shall be supervised and controlled by Provincial government
qualified as such, are automatically deputized as representatives within its jurisdiction whose expenses shall be subsidized by
of NAPOLCOM in their respective jurisdiction and as such, they National Government for not more than three years after
can inspect police forces and units, conduct audit and exercise effectivity of RA6975.
such other functions as may be duly authorized.
3. INTER-LOCAL GOVERNMENT RELATIONS - -
NOTE: Operational Control and Supervision (OCS), defined –
power to direct, oversee, superintend, the day to day functions of Section 29, LGC – Province has SUPERVISORY POWER – (or
police investigation of crimes and crime prevention activities and oversight power but does not include any restraining authority
traffic control in accordance with rules and regulations issued by over supervised party) of province over components but not over
the NAPOLCOM. It includes the power to employ and deploy highly urbanized and independent component cities; Province
police personnel and units. (through Governor) – shall ensure that every component
city/municipality within its territorial jurisdiction acts within scope
NOTE: OCS for GOVERNOR: (a) choose the provincial police of its prescribed powers and functions.
director from a list of three eligibles recommended by the PNP
Director; and (b) as chair of peace and order council, oversee Section 30, LGC – POWER TO REVIEW – Governor has power of
implementation of provincial public safety plan. (Sec. 64, RA8551) review of all executive orders promulgated by component
cities/municipalities within his jurisdiction. Exception: otherwise
NOTE: OCS for CITY/MUNICIPAL MAYOR: includes – power to: (i) provided under the Constitution and special statues.
choose chief of police from list of 5 eligibles recommeneded by City/municipal mayor shall review all executive orders
provincial police director, preferably from same province, city or promulgated by the punong barangay within his jurisdiction.
municipality, no OIC to be for more than 30 days; local peace and
order council through Mayor may recommend recall/reassignment NOTE: It is mandatory upon these named higher local chiefs to
of chief of police when in its perception, the latter has been review executive orders of the lower local chiefs.
ineffective in combating crime or maintaining peace and order in
the LGU, relief shall be based on guidelines established by NOTE: Review – to ensure that executive orders are within the
NAPOLCOM; (ii) recommend to provincial police director, transfer, powers granted by law and in conformity with the
reassignment or detail of PNP members outside their respective provincial/city/municipal ordinances, as the case may be, that is,
city/town residences; (iii) authority to recommend from list of to ensure that such orders do not violate existing law/ordinance.
eligibles previously screened by local peace and order council
appointment of new PNP members to be assigned to the NOTE: Executive order submitted to reviewing authority within 3
respective cities/municipalities without which no such days from issuance; inaction within 30 days from submission, the
appointments shall be attested. Whenever practicable and same is deemed consistent with law and therefore valid.
consistent with requirements of service, PNP members shall be
assigned to the city/municipaliy of their residence; (iv) control Section 31, LGC – MUNICIPAL QUESTIONS – questions affecting
and supervision of anti-gambling operation within its jurisdiction. the municipality are to be submitted to the municipal legal
officer, if none, to the provincial legal officer, if none, to the
NOTE: Exercise operational supervision and control over PNP units provincial prosecutor.
in their respective jurisdiction, except, 30-day period immediately
preceding and 30 days after any national or local and barangay Section 32, LGC – POWER OF GENERAL SUPERVISION –
elections in which instances, police under authority of COMELEC. City/Municipality has power of general supervision over
component barangays to ensure said barangays act within the
Note: City/Municipal mayors, in coordination with local peace and scope of their prescribed powers and functions.
order council which he CHAIRS, shall develop an integrated
area/community public safety plan embrancing a priority of action Section 33, LGC – LGUs through appropriate ordinance, may
and program thrusts for implementation by local PNP stations. group themselves, consolidate or coordinate their efforts/services
and resources for the purpose commonly beneficial to them. For
Case: ANDAYA vs. RTC 319 SCRA 696 – PNP RD Andaya submitted such undertaking, LGUs, upon approval of sangguniang
a list of 5 eligibles not including the name of P/Chief Insp. Andres concerned, after public hearing conducted therefor, shall
Sarmiento, to Mayor of Cebu City. Mayor Garcia wants the name contribute funds, real estate, equipment and other property,
of Sarmiento on the list. Andaya claims Sarmiento not qualified. appoint/assign personnel under terms agreed upon by
SC held that, Mayor has no power to appoint, has only limited participating LGU through a memorandum of agreement.
power of selecting, one from among list of eligibles to be named
chief of police. Mayor cannot require Regional Director to include LGU – PEOPLES’S AND NON-GOV’TAL ORGANIZATIONS RELATIONS
the name of any officer, no matter how qualified, in the list. – People’s organizations are bonafide associations of
citizens with demonstrated capacity to promote public interest
and with identifiable leadership, membership and structure (Art.
NOTE: Unless reversed by President, deputization may be XIII, Section 15 of 1987 Constitution).
withdrawn/revoked by Commission after consultation with
Provincial Governor and congressman concerned. Deputization, Section 16, Art. XIII of the Constitution – “The right of the people
upon good cause shown, may be restored by President directly or and their organizations to effective and reasonable levels of
through the Commission. Withdrawal/Revocation may be on social, political and economic decision-making shall not be
grounds of frequent unauthorized absence; abuse of authority; abridged. The State, by law, shall facilitate the establishment of
providing material support to criminal elements; engaging in acts adequate consultation mechanisms”.
inimical to national security or which negate effectiveness of
peace and order campaign. NOTE: Sections 34, 35 and 36 of LGC implement Section 16, Art.
XIII of the 1987 Constitution.
NOTE: LGU DISCIPLINARY POWERS OVER PNP MEMBERS –
City/Municipal mayors, after due notice and summary hearing, Section 34, LGC – LGU to promote establishments and operation
shall impose DISCIPLINARY PENALTIES for minor offenses of PO and NGO to become active partners in pursuit of local
committed by PNP membes assigned to their respective autonomy.
jurisdiction as provided in Section 41 of RA6975 (not involving
moral turpitude, includes, but not limited to, simple misconduct, Section 35, LGC – LGU may enter joint ventures and such other
insubordination, frequent absences, tardiness, habitual cooperative arrangements with PO and NGO to engage in delivery
drunkenness, gambling as prohibited by law). of certain basic services, capability and livelihood projects.

RELATED ITEMS INVOLVING LGU CONTAINED IN RA 6975 (DILG Act Section 36, LGC – LGU may through local chief executive with the
of 1990): concurrence of sanggunian, provide assistance, financial or
otherwise to such PO and NGO is for economic, socially-oriented,
Section 55 – Bureau of Fire Protection – tasked with prevention environmental or cultural projects to be implemented within its
and suppression of destructive fires, investigate all causes of fire, territorial jurisdiction.
file complaint with fiscal; composed of provincial/district offices
and city/municipal stations; LGU at city and municipal levels shall
be responsible for fire protection and various emergency services
such as rescue and evaluation of injured people at fire-related
incidents and in general, all fire prevention and suppression
measures to secure the safety of life and property of citizenry.

Section 56 – At least 1 fire station with adequate firefighting

facilities and equipment for provincial capitol, city and
municipality; LGU to provide the necessary site for the fire
station.

14