DOMINGO N. SARCOS, as Mayor of Barobo, Surigao del Sur, vs. HON.

RECAREDO CASTILLO, as
Provincial Governor of Surigao del Sur, and THE HON. PROVINCIAL BOARD OF SURIGAO DEL SUR

FACTS:

 Decentralization Act of 1967, which took effect on September 12 of that year.

 Petitioner Domingo N. Sarcos, the duly elected Mayor of Barobo, Surigao del Sur, running as an
independent candidate but winning, nonetheless, in the November 14, 1967 election, was charged with
misconduct and dishonesty in office by respondent Recaredo Castillo, the Provincial Governor of Surigao
del Sur
o "[conniving] with certain private individuals to cut and fell [timber] and [selling] the [timber] or
logs so cut or felled for their own use and benefit, within the communal forest reserve of the
Municipality of Barobo, Province of Surigao del Sur, to the damage and prejudice of the public
and of the government; ...."
 The explanation offered by petitioner : “The said logs were sold in order to raise funds for the purchase of
the police uniforms and arms."
 It was on the basis of the administrative complaint that respondent Governor, ordered the "immediate
preventive suspension of petitioner, from his position as Mayor of Barobo, Surigao del Sur; the same
Administrative Order ... [containing] the immediate designation of Vice-Mayor [Brigido L. Mercader] of
the same town as Acting [Mayor]."
o The governor claimed that it is in accordance with the provisions of Section 5, of Republic Act
No. 5185, otherwise known as the 'Decentralization Act of 1967'.

 Section 5: "Any provision of law to the contrary notwithstanding, the suspension and
removal of elective local officials shall be governed exclusively by the provisions of this
section."

 "Written subscribed and sworn charges against any elective provincial and city official
shall be preferred before the President of the Philippines; against any elective municipal
official before the provincial governor or the secretary of the provincial board concerned;
and against any elective barrio official before the municipal or city mayor or the
municipal or city secretary concerned."

 "Within seven days after the charges are preferred, the President, Governor, or Mayor, as
the case may be, or his duly authorized representative, as provided in the preceding
paragraph, shall notify the respondent of such charges. The President, Provincial Board
and City or Municipal Council, as the case may be, shall hear and investigate the truth or
falsity of the charges within ten days after receipt of such notice: Provided, That no
investigation shall commence or continue within ninety days immediately prior to an
election. The preventive suspension of the respondent officer shall not extend beyond
sixty days after the date of his suspension. At the expiration of sixty days, the suspended
officer, shall be reinstated in office without prejudice to the continuation of the
proceedings against him until their completion, unless the delay in the decision of the
case is due to the fault, neglect or request of the suspended officer, in which case, the
time of delay shall not be counted in computing the time of suspension: Provided,
however, That if the suspended officer shall have been found guilty as charged before the
expiration of the thirty days, his suspension, in the case of municipal and barrio officials,
may continue until the case is finally decided by the Provincial Board."

ISSUE:
  Is the power of preventive suspension of a municipal mayor against whom charges have been filed still
vested in the provincial governor?
 whether or not respondent Provincial Governor is vested with power to order such preventive suspension
under the Decentralization Act of 1967, more specifically Section 5 thereof.

RULING:

 No. We hold that such a power has been withheld from the provincial governor and may no longer be
exercised by him.

 Public officials possess powers, not rights. There must be, therefore, a grant of authority whether express or
implied, to justify any action taken by them. In the absence thereof, what they do as public officials lacks
validity and, if challenged, must be set aside.
 What is the purpose of the Decentralization Act of 1967?
o It is set forth in its declaration of policy. It is "to transform local governments gradually into
effective instruments through which the people can in a most genuine fashion, govern
themselves and work out their own destinies."
o purpose is "to grant to local governments greater freedom and ampler means to respond to
the needs of their people and promote their prosperity and happiness and to effect a more
equitable and systematic distribution of governmental powers and resources."
 It is implicit in our constitutional scheme that full autonomy be accorded the inhabitants of the local units
to govern themselves. Their choice as to who should be their public officials must be respected. Those
elected must serve out their term. If they have to be removed at all it should be for cause in accordance
with the procedure prescribed and by the specific officials of higher category entrusted with such
responsibility.
 We hold, therefore, that under Section 5 of the Decentralization Act of 1967, the power of preventive
suspension is not lodged in the provincial governor.
 the writs prayed for are granted, the preventive suspension of petitioner by respondent Castillo annulled
and set aside with the result that his immediate reinstatement to his position as Municipal Mayor of Barobo,
Surigao del Sur, is ordered.
JOSE J. FERRER, JR., vs. CITY MAYOR HERBERT BAUTISTA, CITY COUNCIL OF QUEZON CITY,
CITY TREASURER OF QUEZON CITY, and CITY ASSESSOR OF QUEZON CITY

FACTS:

 Quezon City Council enacted an Ordinance namely the “Socialized Housing Tax of Quezon City” and
“Garbage Fee”.
o A special assessment equivalent to one-half percent (0.5%) on the assessed value of land in excess
of One Hundred Thousand Pesos (Php100,000.00) shall be collected by the City Treasurer which
shall accrue to the Socialized Housing Programs of the Quezon City Government
o The proceeds collected from the garbage fees on residential properties shall be deposited solely
and exclusively in an earmarked special account under the general fund to be utilized for garbage
collections.
 imposes the following schedule and manner for the annual collection of garbage fees
 Petitioner alleges that he is a registered co-owner of a 371-square-meter residential property in Quezon
City, and that, on January 7, 2014, he paid his realty tax which already included the garbage fee in the sum
of Php100.00
 After that, the court issued a TRO
 Respondents are of the view that this petition for certiorari is improper since they are not tribunals, boards
or officers exercising judicial or quasi-judicial functions.
o Respondents contend that petitioner failed to exhaust administrative remedies for his non-
compliance with Section 187 of the LGC
 Petitioner, however, counters that in enacting Ordinance Nos. SP-2095 and SP-2235, the Quezon City
Council exercised quasi-judicial function because the ordinances ruled against the property owners who
must pay the SHT and the garbage fee, exacting from them funds for basic essential public services that
they should not be held liable.
 Petitioner’s contention
o For petitioner, it is noteworthy that respondents did not raise the issue that the Quezon City
Government is in dire financial state and desperately needs money to fund housing for informal
settlers and to pay for garbage collection.

o According to petitioner, the constitutional provision is not a carte blanche for the LGU to tax
everything under its territorial and political jurisdiction as the provision itself admits of guidelines
and limitations.

o According to petitioner, the constitutional provision is not a carte blanche for the LGU to tax
everything under its territorial and political jurisdiction as the provision itself admits of guidelines
and limitations.

o Petitioner contends that the imposition of garbage fee is tantamount to double taxation because
garbage collection is a basic and essential public service that should be paid out from property tax,
business tax, transfer tax, amusement tax, community tax certificate, other taxes, and the IRA of
the Quezon City Government.

o petitioner argues that the SHT is a penalty imposed on real property owners because it burdens
them with expenses to provide funds for the housing of informal settlers, and that it is a class
legislation since it favors the latter who occupy properties which is not their own and pay no taxes.

 Respondent’s contention:
o relied on the presumption in favor of the constitutionality of Ordinance
 o They argue that the burden of establishing the invalidity of an ordinance rests heavily upon the
party challenging its constitutionality. They insist that the questioned ordinances are proper
exercises of police power
o As to the issue of publication, respondents argue that where the law provides for its own
effectivity, publication in the Official Gazette is not necessary so long as it is not punitive in
character

o Respondents emphasize that the SHT is pursuant to the social justice principle found in Sections 1
and 2, Article XIII of the 1987 Constitution and Sections 2 (a)58 and 4359 of R.A. No. 7279, or
the "Urban Development and Housing Act of 1992 ( UDHA ).

 Ordinance No. SP-2095 is also not oppressive since the tax rate being imposed is
consistent with the UDHA.
o Garbage fee: there is no double taxation because the ordinance involves a fee. Even assuming that
the garbage fee is a tax, the same cannot be a direct duplicate tax as it is imposed on a different
subject matter and is of a different kind or character.

ISSUE:

Whether or not the two ordinances (SHT and Garbage Fee) are constitutional

RULING:

 We agree that respondents neither acted in any judicial or quasi-judicial capacity nor arrogated unto
themselves any judicial or quasi-judicial prerogatives.

o A respondent is said to be exercising judicial function where he has the power to determine what
the law is and what the legal rights of the parties are, and then undertakes to determine these
questions and adjudicate upon the rights of the parties.

 Quasi-judicial function, is "a term which applies to the actions, discretion, etc., of public administrative
officers or bodies … required to investigate facts or ascertain the existence of facts, hold hearings, and
draw conclusions from them as a basis for their official action and to exercise discretion of a judicial
nature."

 Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a
law that gives rise to some specific rights of persons or property under which adverse claims to such rights
are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with
power and authority to determine the law and adjudicate the respective rights of the contending parties.
 The enactment by the Quezon City Council of the assailed ordinances was done in the exercise of its
legislative, not judicial or quasi-judicial, function.
 Under Republic Act (R.A.) No.7160, or the Local Government Code of 1991 (LGC), local legislative
power shall be exercised by the Sangguniang Panlungsod for the city. Said law likewise is specific in
providing that the power to impose a tax, fee, or charge, or to generate revenue shall be exercised by the
sanggunian of the local government unit concerned through an appropriate ordinance.
 We consider that respondents City Mayor, City Treasurer, and City Assessor are performing ministerial
functions.
o A ministerial function is one that an officer or tribunal performs in the context of a given set of
facts, in a prescribed manner and without regard for the exercise of his or its own judgment, upon
the propriety or impropriety of the act done
 Respondent Mayor, as chief executive of the city government, has the duty to ensure that all taxes and other
revenues of the city are collected, and that city funds are applied to the payment of expenses and settlement
of obligations of the city, in accordance with law or ordinance
 LGC: all local taxes, fees, and charges shall be collected by the provincial, city, municipal, or barangay
treasurer, or their duly-authorized deputies, while the assessor shall take charge, among others, of ensuring
that all laws and policies governing the appraisal and assessment of real properties for taxation purposes are
properly executed.
 an ordinance, as in every law, is presumed valid
 An ordinance carries with it the presumption of validity. The question of reasonableness though is open
to judicial inquiry. Much should be left thus to the discretion of municipal authorities. Courts will go slow
in writing off an ordinance as unreasonable unless the amount is so excessive as to be prohibitive, arbitrary,
unreasonable, oppressive, or confiscatory. A rule which has gained acceptance is that factors relevant to
such an inquiry are the municipal conditions as a whole and the nature of the business made subject to
imposition.
 powers of the LGU to enact and must be passed according to the procedure prescribed by law, it should
also conform to the following requirements:
o (1) not contrary to the Constitution or any statute;
o (2) not unfair or oppressive;
o (3) not partial or discriminatory;
o (4) not prohibit but may regulate trade;
o (5) general and consistent with public policy; and
o (6) not unreasonable.
 tests are divided into:
o formal
 (i.e., whether the ordinance was enacted within the corporate powers of the LGU and
whether it was passed in accordance with the procedure prescribed by law),
o substantive
 ( i.e., involving inherent merit, like the conformity of the ordinance with the limitations
under the Constitution and the statutes, as well as with the requirements of fairness and
reason, and its consistency with public policy)
 An ordinance must pass muster under the test of constitutionality and the test of consistency with the
prevailing laws. If not, it is void.
 Ordinance should uphold the principle of the supremacy of the Constitution.
 Batangas CATV, Inc. v. Court of Appeals has this to say: It is a fundamental principle that municipal
ordinances are inferior in status and subordinate to the laws of the state. An ordinance in conflict with a
state law of general character and statewide application is universally held to be invalid. The principle is
frequently expressed in the declaration that municipal authorities, under a general grant of power, cannot
adopt ordinances which infringe the spirit of a state law or repugnant to the general policy of the state. In
every power to pass ordinances given to a municipality, there is an implied restriction that the ordinances
shall be consistent with the general law.
o Reasons:
 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.
 Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature.
 The power to create still includes the power to destroy. The power to grant still includes
the power to withhold or recall.
 By and large, however, the national legislature is still the principal of the local
government units, which cannot defy its will or modify or violate it.
 LGUs must be reminded that they merely form part of the whole; that the policy of
ensuring the autonomy of local governments was never intended by the drafters of the
 1987 Constitution to create an imperium in imperio and install an intra-sovereign political
subdivision independent of a single sovereign state.
 "[M]unicipal corporations are bodies politic and corporate, created not only as local units of local self-
government, but as governmental agencies of the state. The legislature, by establishing a municipal
corporation, does not divest the State of any of its sovereignty; absolve itself from its right and duty to
administer the public affairs of the entire state; or divest itself of any power over the inhabitants of the
district which it possesses before the charter was granted."
 LGUs are able to legislate only by virtue of a valid delegation of legislative power from the national
legislature; they are mere agents vested with what is called the power of subordinate legislation.
 "Congress enacted the LGC as the implementing law for the delegation to the various LGUs of the State’s
great powers, namely: the police power, the power of eminent domain, and the power of taxation. The
LGC was fashioned to delineate the specific parameters and limitations to be complied with by each LGU
in the exercise of these delegated powers with the view of making each LGU a fully functioning
subdivision of the State subject to the constitutional and statutory limitations."
 Specifically, with regard to the power of taxation, it is indubitably the most effective instrument to raise
needed revenues in financing and supporting myriad activities of the LGUs for the delivery of basic
services essential to the promotion of the general welfare and the enhancement of peace, progress, and
prosperity of the people

 Thenceforth, the power to tax is no longer vested exclusively on Congress; local legislative bodies are now
given direct authority to levy taxes, fees and other charges pursuant to Article X, Section 5 of the 1987
Constitution, viz: "Section 5. Each Local Government unit shall have the power to create its own sources of
revenue, to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may
provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue
exclusively to the local governments."

 This paradigm shift results from the realization that genuine development can be achieved only by
strengthening local autonomy and promoting decentralization of governance. For a long time, the country’s
highly centralized government structure has bred a culture of dependence among local government leaders
upon the national leadership. It has also "dampened the spirit of initiative, innovation and imaginative
resilience in matters of local development on the part of local government leaders." The only way to shatter
this culture of dependence is to give the LGUs a wider role in the delivery of basic services, and confer
them sufficient powers to generate their own sources for the purpose. To achieve this goal, Section 3 of
Article X of the 1987 Constitution mandates Congress to enact a local government code that will,
consistent with the basic policy of local autonomy , set the guidelines and limitations to this grant of taxing
powers
 Nevertheless, the fundamental law did not intend the delegation to be absolute and unconditional; the
constitutional objective obviously is to ensure that, while the local government units are being strengthened
and made more autonomous , the legislature must still see to it that
o (a) the taxpayer will not be over-burdened or saddled with multiple and unreasonable impositions;
o (b) each local government unit will have its fair share of available resources;
o (c) the resources of the national government will not be unduly disturbed; and
o (d) local taxation will be fair, uniform, and just."
 Police power, which flows from the recognition that salus populi est suprema lex (the welfare of the people
is the supreme law), is the plenary power vested in the legislature to make statutes and ordinances to
promote the health, morals, peace, education, good order or safety and general welfare of the people.
 As with the State, LGUs may be considered as having properly exercised their police power only if there is
a lawful subject and a lawful method or, to be precise, if the following requisites are met: (1) the interests
of the public generally, as distinguished from those of a particular class, require its exercise and (2) the
means employed are reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals.
 The tax is not a pure exercise of taxing power or merely to raise revenue; it is levied with a regulatory
purpose. The levy is primarily in the exercise of the police power for the general welfare of the entire city.
It is greatly imbued with public interest. Removing slum areas in Quezon City is not only beneficial to the
underprivileged and homeless constituents but advantageous to the real property owners as well. The
situation will improve the value of the their property investments, fully enjoying the same in view of an
orderly, secure, and safe community, and will enhance the quality of life of the poor, making them law-
abiding constituents and better consumers of business products.

 The requirements for a valid and reasonable classification are:

o (1) it must rest on substantial distinctions;
o (2) it must be germane to the purpose of the law;
o (3) it must not be limited to existing conditions only; and
o (4) it must apply equally to all members of the same class.
 Ordinances regulating waste removal carry a strong presumption of validity.
o A municipality has an affirmative duty to supervise and control the collection of garbage within its
corporate limits. The LGC specifically assigns the responsibility of regulation and oversight of
solid waste to local governing bodies because the Legislature determined that such bodies were in
the best position to develop efficient waste management programs.
o To impose on local governments the responsibility to regulate solid waste but not grant them the
authority necessary to fulfill the same would lead to an absurd result.

 In this jurisdiction, pursuant to Section 16 of the LGC and in the proper exercise of its corporate powers
under Section 22 of the same, the Sangguniang Panlungsod of Quezon City, like other local legislative
bodies, is empowered to enact ordinances, approve resolutions, and appropriate funds for the general
welfare of the city and its inhabitants. Section 16 of the LGC provides:

o SECTION 16. General Welfare . – Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate,
or incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare. Within their respective territorial jurisdictions, local government
units shall ensure and support, among other things, the preservation and enrichment of culture,
promote health and safety, enhance the right of the people to a balanced ecology, encourage and
support the development of appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and convenience of
their inhabitants.

 The general welfare clause is the delegation in statutory form of the police power of the State to LGUs
 One of the operative principles of decentralization is that, subject to the provisions of the LGC and
national policies, the LGUs shall share with the national government the responsibility in the management
and maintenance of ecological balance within their territorial jurisdiction.
 "Charges" refer to pecuniary liability, as rents or fees against persons or property, while "Fee" means a
charge fixed by law or ordinance for the regulation or inspection of a business or activity.
 WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and legality of Ordinance
No. SP-2095, S-2011, or the "Socialized Housing Tax of Quezon City," is· SUSTAINED for being
consistent ·with Section·43 of Republic Act No. ·7279. On the other hand, Ordinance No. SP-2235, S-
2013, which collects an annual garbage fee on all domestic households in Quezon City, is hereby declared
as UNCONSTITUTIONAL AND ILLEGAL
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, vs. BEL-AIR VILLAGE ASSOCIATION,
INC.

FACTS:

 Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila.
Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose
members are homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the
registered owner of Neptune Street, a road inside Bel-Air Village.

 Respondent received from petitioner, a notice requesting respondent to open Neptune Street to public
vehicular traffic

 Respondent prayed for the issuance of a temporary restraining order and preliminary injunction enjoining
the opening of Neptune Street and prohibiting the demolition of the perimeter wall.

 the appellate court rendered a Decision on the merits of the case finding that the MMDA has no authority to
order the opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter
walls. It held that the authority is lodged in the City Council of Makati by ordinance.

 Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private
residential subdivision in the heart of the financial and commercial district of Makati City. It runs parallel to
Kalayaan Avenue, a national road open to the general public.

 Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an
agent of the state endowed with police power in the delivery of basic services in Metro Manila.

o One of these basic services is traffic management which involves the regulation of the use of
thoroughfares to insure the safety, convenience and welfare of the general public.

o From the premise that it has police power, it is now urged that there is no need for the City of
Makati to enact an ordinance opening Neptune street to the public

ISSUE:

Has the metropolitan manila development authority (mmda) the mandate to open neptune street to public traffic
pursuant to its regulatory and police powers?

RULING:

 It bears stressing that police power is lodged primarily in the National Legislature. It cannot be exercised
by any group or body of individuals not possessing legislative power. The National Legislature, however,
may delegate this power to the President and administrative boards as well as the lawmaking bodies of
municipal corporations or local government units. Once delegated, the agents can exercise only such
legislative powers as are conferred on them by the national lawmaking body.

 A local government is a "political subdivision of a nation or state which is constituted by law and has
substantial control of local affairs."

o The Local Government Code of 1991 defines a local government unit as a "body politic and
corporate." — one endowed with powers as a political subdivision of the National Government
and as a corporate entity representing the inhabitants of its territory.
 o Local government units are the provinces, cities, municipalities and barangays.

o They are also the territorial and political subdivisions of the state.

 The legislative body of the

o provincial government is the sangguniang panlalawigan,

o city government is the sangguniang panlungsod,

o municipal government is the sangguniang bayan,

 Code empowers the three to "enact ordinances, approve resolutions and appropriate
funds for the general welfare of the [province, city or municipality, as the case may be],
and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the
corporate powers of the [province, city municipality] provided under the Code . . . "

o barangay is the sangguniang barangay.

 Code gives the sangguniang barangay the power to "enact ordinances as may be
necessary to discharge the responsibilities conferred upon it by law or ordinance and to
promote the general welfare of the inhabitants thereon."

 Metropolitan or Metro Manila is a body composed of several local government units —

o i.e., twelve (12) cities and five (5) municipalities,

 cities: Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las
Pinas, Marikina, Paranaque and Valenzuela

 municipalities: Malabon, Navotas, Pateros, San Juan and Taguig.

 Republic Act No. 7924 in 1995, Metropolitan Manila was declared as a "special development and
administrative region" and the Administration of "metro-wide" basic services affecting the region placed
under "a development authority" referred to as the MMDA.

 "Metro-wide services" are those "services which have metro-wide impact and transcend local political
boundaries or entail huge expenditures such that it would not be viable for said services to be provided by
the individual local government units comprising Metro Manila."

o There are seven (7) basic metro-wide services and the scope of these services cover the following:

 (1) development planning;

 (2) transport and traffic management;

 (3) solid waste disposal and management;

 (4) flood control and sewerage management;

 (5) urban renewal, zoning and land use planning, and shelter services;
  (6) health and sanitation, urban protection and pollution control; and

 (7) public safety.

 The implementation of the MMDA's plans, programs and projects is undertaken by the

o local government units, national government agencies, accredited people's organizations, non-
governmental organizations, and the private sector as well as by the MMDA itself.

o For this purpose, the MMDA has the power to enter into contracts, memoranda of agreement and
other arrangements with these bodies for the delivery of the required services Metro Manila.

 The governing board of the MMDA is the Metro Manila Council. The Council is composed of:

o the mayors of the component 12 cities and 5 municipalities

o the president of the Metro Manila Vice-Mayors' League

o the president of the Metro Manila Councilors' League

 Metro Manila Council approves metro-wide plans, programs and projects, and issues the necessary rules
and regulations for the implementation of said plans; it approves the annual budget of the MMDA and
promulgate the rules and regulations for the delivery of basic services, collection of service and regulatory
fees, fines and penalties.

 The Council shall be the policy-making body of the MMDA

 It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination,
regulation, implementation, preparation, management, monitoring, setting of policies, installation of a
system and administration.

o There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative
power. Even the Metro Manila Council has not been delegated any legislative power.

 Unlike the legislative bodies of the local government units, there is no provision in R.A. No. 7924 that
empowers the MMDA or its Council to "enact ordinances, approve resolutions appropriate funds for the
general welfare" of the inhabitants of Metro Manila.

 The MMDA is, as termed in the charter itself, "development authority." It is an agency created for the
purpose of laying down policies and coordinating with the various national government agencies, people's
organizations, non-governmental organizations and the private sector for the efficient and expeditious
delivery of basic services in the vast metropolitan area.

 All its functions are administrative in nature and these are actually summed up in the charter itself

 Metropolitan Manila was established as a "public corporation"

 Under the 1987 Constitution, the local government units became primarily responsible for the governance
of their respective political subdivisions. The MMA's jurisdiction was limited to addressing common
problems involving basic services that transcended local boundaries. It did not have legislative power. Its
 power was merely to provide the local government units technical assistance in the preparation of local
development plans.

 Transitory Provisions of the Constitution gave the President of the Philippines the power to constitute the
Metropolitan Authority, viz: Sec. 8. Until otherwise provided by Congress, the President may constitute the
Metropolitan Authority to be composed of the heads of all local government units comprising the
Metropolitan Manila area.

 The explanatory note to the bill stated that the proposed MMDA is a "development authority" which is a
"national agency, not a political government unit."

 It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed
with legislative power. It is not even a "special metropolitan political subdivision" as contemplated in
Section 11, Article X of the Constitution. The creation of a "special metropolitan political subdivision"
requires the approval by a majority of the votes cast in a plebiscite in the political units directly affected."

 The Chairman of the MMDA is not an official elected by the people, but appointed by the President with
the rank and privileges of a cabinet member.

 In fact, part of his function is to perform such other duties as may be assigned to him by the President,
whereas in local government units, the President merely exercises supervisory authority. This emphasizes
the administrative character of the MMDA.

 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.
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, vs. DANTE O. GARIN

FACTS:

 respondent Dante O. Garin, a lawyer, who was issued a traffic violation receipt (TVR) and his driver's
license confiscated for parking illegally along Gandara Street, Binondo, Manila

 Garin contends that, in the absence of any implementing rules and regulations, Sec. 5(f) of Rep. Act No.
7924 grants the MMDA unbridled discretion to deprive erring motorists of their licenses, pre-empting a
judicial determination of the validity of the deprivation, thereby violating the due process clause of the
Constitution.

o The respondent further contended that the provision violates the constitutional prohibition against
undue delegation of legislative authority, allowing as it does the MMDA to fix and impose
unspecified – and therefore unlimited - fines and other penalties on erring motorists.

 MMDA, represented by the Office of the Solicitor General, pointed out that the powers granted to it by Sec.
5(f) of Rep. Act No. 7924 are limited to the fixing, collection and imposition of fines and penalties for
traffic violations, which powers are legislative and executive in nature; the judiciary retains the right to
determine the validity of the penalty imposed. It further argued that the doctrine of separation of powers
does not preclude "admixture" of the three powers of government in administrative agencies

o Moreover, it asserts that though the circular is the basis for the issuance of TVRs, the basis for the
summary confiscation of licenses is Sec. 5(f) of Rep. Act No. 7924 itself, and that such power is
self-executory and does not require the issuance of any implementing regulation or circular.

ISSUE:

validity of Section 5(f) of Republic Act No. 7924 creating the Metropolitan Manila Development Authority
(MMDA), which authorizes it to confiscate and suspend or revoke driver's licenses in the enforcement of traffic laws
and regulations.

RULING:

 MMDA correctly points out that a license to operate a motor vehicle is not a property right, but a privilege
granted by the state, which may be suspended or revoked by the state in the exercise of its police power, in
the interest of the public safety and welfare, subject to the procedural due process requirements.

 Rep. Act No. 7924 does not grant the MMDA with police power, let alone legislative power, and that all its
functions are administrative in nature.

 MMDA is not a local government unit or a public corporation endowed with legislative power, and, unlike
its predecessor, the Metro Manila Commission, it has no power to enact ordinances for the welfare of the
community.

 MMDA is not a political unit of government. The power delegated to the MMDA is that given to the Metro
Manila Council to promulgate administrative rules and regulations in the implementation of the MMDA's
functions. There is no grant of authority to enact ordinances and regulations for the general welfare of
the inhabitants of the metropolis.
 Therefore, insofar as Sec. 5(f) of Rep. Act No. 7924 is understood by the lower court and by the petitioner
to grant the MMDA the power to confiscate and suspend or revoke drivers' licenses without need of any
other legislative enactment, such is an unauthorized exercise of police power.

 The contested clause in Sec. 5(f) states that the petitioner shall "install and administer a single ticketing
system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations,
whether moving or nonmoving in nature, and confiscate and suspend or revoke drivers' licenses in the
enforcement of such traffic laws and regulations, the provisions of Rep. Act No. 4136 and P.D. No. 1605 to
the contrary notwithstanding," and that "(f)or this purpose, the Authority shall enforce all traffic laws and
regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP,
traffic enforcers of local government units, duly licensed security guards, or members of non-governmental
organizations to whom may be delegated certain authority, subject to such conditions and requirements as
the Authority may impose."

 Thus, where there is a traffic law or regulation validly enacted by the legislature or those agencies to whom
legislative powers have been delegated (the City of Manila in this case), the petitioner is not prohibited –
and in fact is duty-bound – to confiscate and suspend or revoke drivers' licenses in the exercise of its
mandate of transport and traffic management, as well as the administration and implementation of all traffic
enforcement operations, traffic engineering services and traffic education programs.

o as long as there is a traffic law or regulation enacted by the legislature or LGU

 This is consistent with our ruling in Bel-Air that the MMDA is a development authority created for the
purpose of laying down policies and coordinating with the various national government agencies, people's
organizations, non-governmental organizations and the private sector, which may enforce, but not enact,
ordinances.

 a statute is to be read in a manner that would breathe life into it, rather than defeat it

 Furthermore, this case has been rendered moot and academic by the implementation of Memorandum
Circular No. 04, Series of 2004

o as stated in the circular, the MMDA can no longer confiscate driver’s license
JOSE BELEY, in his capacity as Registrar of the Motor Vehicles Office, Nueva Ecija Agency, vs. HON.
GENARO TAN TORRES, as Judge of the Court of First Instance of Nueva Ecija and FELIX B. MARBELLA

FACTS:

 Felix B. Marbella instituted a Civil case, alleging that the defendants have illegally detained a truck with
ten tires, and praying for their release and for damages for their alleged illegal seizure and detention.

 defendants Jose A. Tan and Pacifico Mendoza again tried to seize said truck but succeeded in taking only
its plate number and the license of its driver Quirico Curamen. Consequently, respondent Marbella filed a
criminal action against said defendants Tan and Mendoza for grave coercion with the Provincial Fiscal,
which case is still pending action.

ISSUE:

the validity of the order of the lower court dated October 20, 1960, insofar as it orders the petitioner herein to return
to the respondent Marbella the aforesaid plate number and driver's license.

RULING:

 The confiscation of the plate and the driver's license was, therefore, due to a violation of the Motor Vehicle
Law by Marbella, for operating a vehicle on the public highways without the corresponding certificate of
registration and plates (Sec. 21, Ibid). The plate was evidently a stolen plate and the same was being used
by Marbella for a truck of his own which was not registered.

 The retention of the driver's license was also justified in view of the fact that the truck was found being
used with a stolen plate, and the driver's license is to be utilized as evidence against the driver of the truck.

 We prefer to base our decision in the case on the ground that petitioner herein had the right to retain
possession of the articles mentioned because they are the instruments of an offense or evidence thereof.
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, vs. TRACKWORKS RAIL TRANSIT
ADVERTISING, VENDING AND PROMOTIONS, INC

FACTS:

 Government, through the Department of Transportation and Communications, entered into a build-lease-
transfer agreement (BLT agreement) with Metro Rail Transit Corporation, Limited (MRTC) pursuant to
Republic Act No. 6957 (Build, Operate and Transfer Law)

o under which MRTC undertook to build MRT3 subject to the condition that MRTC would own
MRT3 for 25 years, upon the expiration of which the ownership would transfer to the
Government.

 Later on, Trackworks entered into a contract for advertising services with MRTC. Trackworks thereafter
installed commercial billboards, signages and other advertizing media in the different parts of the MRT3.

 MMDA requested Trackworks to dismantle the billboards, signages and other advertizing media pursuant
to MMDA Regulation No. 96-009, whereby MMDA prohibited the posting, installation and display of any
kind or form of billboards, signs, posters, streamers, in any part of the road, sidewalk, center island, posts,
trees, parks and open space.

 RTC and CA: permanently enjoining MMDA from dismantling, removing or destroying the billboards,
signages and other advertizing media installed by Trackworks on the interior and exterior structures of the
MRT3

ISSUE: whether the Metropolitan Manila Development Authority (MMDA) could unilaterally dismantle the
billboards, signages and other advertizing media in the structures of the Metro Rail Transit 3 (MRT3) installed by
respondent advertising company by virtue of its existing contract with the owner of the MRT3.

RULING:

 No

 That Trackworks derived its right to install its billboards, signages and other advertizing media in the
MRT3 from MRTC’s authority under the BLT agreement to develop commercial premises in the MRT3
structure or to obtain advertising income therefrom is no longer debatable. Under the BLT agreement,
indeed, MRTC owned the MRT3 for 25 years, upon the expiration of which MRTC would transfer
ownership of the MRT3 to the Government.

 Considering that MRTC remained to be the owner of the MRT3 during the time material to this case, and
until this date, MRTC’s entering into the contract for advertising services with Trackworks was a valid
exercise of ownership by the former

 MMDA simply had no power on its own to dismantle, remove, or destroy the billboards, signages and other
advertising media installed on the MRT3 structure by Trackworks.

 the Court had the occasion to rule that MMDA’s powers were limited to the formulation, coordination,
regulation, implementation, preparation, management, monitoring, setting of policies, installing a system,
and administration. Nothing in Republic Act No. 7924 granted MMDA police power, let alone legislative
power
  The MMDA is, as termed in the charter itself, a "development authority". It is an agency created for the
purpose of laying down policies and coordinating with the various national government agencies, people’s
organizations, non-governmental organizations and the private sector for the efficient and expeditious
delivery of basic services in the vast metropolitan area. All its functions are administrative in nature and
these are actually summed up in the charter itself

 MMDA Regulation No. 96-009 and MMC Memorandum Circular No. 88-09 did not apply to Trackworks’
billboards, signages and other advertising media. The prohibition against posting, installation and display of
billboards, signages and other advertising media applied only to public areas, but MRT3, being private
property pursuant to the BLT agreement between the Government and MRTC, was not one of the areas as
to which the prohibition applied.

 The power to enforce the provisions of the Building Code was lodged in the Department of Public Works
and Highways (DPWH), not in MMDA

METROPOLITAN MANILA DEVELOPMENT AUTHORITY v. CONCERNED RESIDENTS OF MANILA

BAY

FACTS:

 Concerned Residents of Manila Bay filed a complaint against petitioner, for the cleanup, rehabilitation, and
protection of the Manila Bay

o the complaint alleged that the water quality of the Manila Bay had fallen way below the allowable
standards set by law, specifically Presidential Decree No. (PD) 1152 or the Philippine
Environment Code.

 respondents, prayed that petitioners be ordered to clean the Manila Bay and submit to the RTC a concerted
concrete plan of action for the purpose.

 Petitioners, before the CA, were one in arguing in the main that the pertinent provisions of the Environment
Code (PD 1152) relate only to the cleaning of specific pollution incidents and do not cover cleaning in
general.

o And apart from raising concerns about the lack of funds appropriated for cleaning purposes,
petitioners also asserted that the cleaning of the Manila Bay is not a ministerial act which can
be compelled by mandamus.

 Petitioners maintain that the MMDA’s duty to take measures and maintain adequate solid waste and liquid
disposal systems necessarily involves policy evaluation and the exercise of judgment on the part of the
agency concerned.

o They argue that the MMDA, in carrying out its mandate, has to make decisions, including
choosing where a landfill should be located by undertaking feasibility studies and cost
estimates, all of which entail the exercise of discretion.

 According to respondents, the MMDA are without discretion, for example, to choose which bodies of water
they are to clean up, or which discharge or spill they are to contain.

o By the same token, respondents maintain that petitioners are bereft of discretion on whether or not
to alleviate the problem of solid and liquid waste disposal; in other words, it is the MMDA’s
ministerial duty to attend to such services.
ISSUE:

 do Sections 17 and 20 of PD 1152 under the headings, Upgrading of Water Quality and Clean-up
Operations, envisage a cleanup in general or are they limited only to the cleanup of specific pollution
incidents?

 can petitioners be compelled by mandamus to clean up and rehabilitate the Manila Bay?

RULING:

The Cleaning or Rehabilitation of Manila Bay Can be Compelled by Mandamus

 A ministerial duty is one that "requires neither the exercise of official discretion nor judgment."

o It connotes an act in which nothing is left to the discretion of the person executing it. It is a
"simple, definite duty arising under conditions admitted or proved to exist and imposed by law."

 While the implementation of the MMDA’s mandated tasks may entail a decision-making process, the
enforcement of the law or the very act of doing what the law exacts to be done is ministerial in nature and
may be compelled by mandamus.

 The MMDA’s duty in the area of solid waste disposal, as may be noted, is set forth not only in the
Environment Code (PD 1152) and RA 9003, but in its charter as well. This duty of putting up a proper
waste disposal system cannot be characterized as discretionary, for, as earlier stated, discretion presupposes
the power or right given by law to public functionaries to act officially according to their judgment or
conscience

 A discretionary duty is one that "allows a person to exercise judgment and choose to perform or not to
perform."

 Any suggestion that the MMDA has the option whether or not to perform its solid waste disposal-related
duties ought to be dismissed for want of legal basis.

 The MMDA, is duty-bound to put up and maintain adequate sanitary landfill and solid waste and liquid
disposal system as well as other alternative garbage disposal systems. It is primarily responsible for the
implementation and enforcement of the provisions of RA 9003, which would necessary include its penal
provisions, within its area of jurisdiction

Secs. 17 and 20 of the Environment Code Include Cleaning in General

 Respondents are correct. For one thing, said Sec. 17 does not in any way state that the government agencies
concerned ought to confine themselves to the containment, removal, and cleaning operations when a
specific pollution incident occurs. On the contrary, Sec. 17 requires them to act even in the absence of a
specific pollution incident, as long as water quality "has deteriorated to a degree where its state will
adversely affect its best usage."

 Petitioners’ assertion, that they have to perform cleanup operations in the Manila Bay only when there is a
water pollution incident and the erring polluters do not undertake the containment, removal, and cleanup
operations, is quite off mark.

 Pursuant to Title XII (Local Government) of the Administrative Code of 1987 and Sec. 25 of the Local
Government Code of 1991, the DILG, in exercising the President’s power of general supervision and its
 duty to promulgate guidelines in establishing waste management programs under Sec. 43 of the Philippine
Environment Code (PD 1152), shall direct all LGUs in Metro Manila, Rizal, Laguna, Cavite, Bulacan,
Pampanga, and Bataan to inspect all factories, commercial establishments, and private homes along the
banks of the major river systems in their respective areas of jurisdiction, such as but not limited to the
Pasig-Marikina-San Juan Rivers, the NCR (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-
Tullahan-Tenejeros Rivers, the Meycauayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River,
the Imus (Cavite) River, the Laguna De Bay, and other minor rivers and waterways that eventually
discharge water into the Manila Bay; and the lands abutting the bay, to determine whether they have
wastewater treatment facilities or hygienic septic tanks as prescribed by existing laws, ordinances, and rules
and regulations. If none be found, these LGUs shall be ordered to require non-complying establishments
and homes to set up said facilities or septic tanks within a reasonable time to prevent industrial wastes,
sewage water, and human wastes from flowing into these rivers, waterways, esteros, and the Manila Bay,
under pain of closure or imposition of fines and other sanctions.

 The MMDA, as the lead agency and implementor of programs and projects for flood control projects and
drainage services in Metro Manila, in coordination with the DPWH, DILG, affected LGUs, PNP Maritime
Group, Housing and Urban Development Coordinating Council (HUDCC), and other agencies, shall
dismantle and remove all structures, constructions, and other encroachments established or built in
violation of RA 7279, and other applicable laws along the Pasig-Marikina-San Juan Rivers, the NCR
(Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, and connecting
waterways and esteros in Metro Manila.

 In addition, the MMDA is ordered to establish, operate, and maintain a sanitary landfill, as prescribed by
RA 9003, within a period of one (1) year from finality of this Decision. On matters within its territorial
jurisdiction and in connection with the discharge of its duties on the maintenance of sanitary landfills and
like undertakings, it is also ordered to cause the apprehension and filing of the appropriate criminal cases
against violators of the respective penal provisions of RA 9003, Sec. 27 of RA 9275 (the Clean Water Act),
and other existing laws on pollution.
THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY vs. VIRON TRANSPORTATION CO.,
INC

FACTS:

 President Gloria Macapagal Arroyo issued the E.O. on February 10, 2003, "Providing for the
Establishment of Greater Manila Mass Transport System,"

o WHEREAS, the Metropolitan Manila Development Authority (MMDA) is tasked to undertake

measures to ease traffic congestion in Metro Manila and ensure the convenient and efficient travel
of commuters within its jurisdiction

o WHEREAS, the MMDA has recommended a plan to decongest traffic by eliminating the bus
terminals now located along major Metro Manila thoroughfares and providing more convenient
access to the mass transport system to the commuting public through the provision of mass
transport terminal facilities that would integrate the existing transport modes, namely the buses,
the rail-based systems of the LRT, MRT and PNR and to facilitate and ensure efficient travel
through the improved connectivity of the different transport modes;

 Viron Transport Co., Inc., a domestic corporation engaged in the business of public transportation with a
provincial bus operation, filed a petition for declaratory relief

o Alleging that the MMDA’s authority does not include the power to direct provincial bus operators
to abandon their existing bus terminals to thus deprive them of the use of their property, Viron
asked the court to construe the scope, extent and limitation of the power of the MMDA to regulate
traffic under R.A. No. 7924, "An Act Creating the Metropolitan Manila Development Authority,
Defining its Powers and Functions, Providing Funds Therefor and For Other Purposes."

 petitioners’ contention that the E.O. is a mere administrative issuance which creates no relation with third
persons

 Petitioners submit, however, that the real issue concerns the President’s authority to undertake or to cause
the implementation of the Project.
o They assert that the authority of the President is derived from E.O. No. 125, "Reorganizing the
Ministry of Transportation and Communications Defining its Powers and Functions and for Other
Purposes," her residual power and/or E.O. No. 292, otherwise known as the Administrative Code
of 1987.
o They add that the E.O. is also a valid exercise of the police power.

ISSUE:

whether the MMDA’s power to regulate traffic in Metro Manila included the power to direct provincial bus
operators to abandon and close their duly established and existing bus terminals in order to conduct business in a
common terminal

RULING:

 Respecting the President’s authority to order the implementation of the Project in the exercise of the police
power of the State, suffice it to stress that the powers vested in the DOTC Secretary to establish and
administer comprehensive and integrated programs for transportation and communications and to issue
 orders, rules and regulations to implement such mandate (which, as previously discussed, may also be
exercised by the President) have been so delegated for the good and welfare of the people.
o Hence, these powers partake of the nature of police power.
 The authority of the President to order the implementation of the Project notwithstanding, the designation
of the MMDA as the implementing agency for the Project may not be sustained. It is ultra vires, there being
no legal basis therefor.
 It bears stressing that under the provisions of E.O. No. 125, as amended, it is the DOTC, and not the
MMDA, which is authorized to establish and implement a project

o Thus, the President, although authorized to establish or cause the implementation of the Project,
must exercise the authority through the instrumentality of the DOTC which, by law, is the
primary implementing and administrative entity in the promotion, development and regulation of
networks of transportation, and the one so authorized to establish and implement a project such as
the Project in question.

 By designating the MMDA as the implementing agency of the Project, the President clearly overstepped
the limits of the authority conferred by law, rendering E.O. No. 179 ultra vires.

 R.A. No. 7924 declared the Metropolitan Manila area as a "special development and administrative region"
and placed the administration of "metro-wide" basic services affecting the region under the MMDA.

 MMDA is not vested with police power.

o Even assuming arguendo that police power was delegated to the MMDA, its exercise of such
power does not satisfy the two tests of a valid police power measure, viz:

 (1) the interest of the public generally, as distinguished from that of a particular class,
requires its exercise; and

 (2) the means employed are reasonably necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals

 The true role of Constitutional Law is to effect an equilibrium between authority and liberty so that rights
are exercised within the framework of the law and the laws are enacted with due deference to rights.
 this Court fails to see how the prohibition against the existence of respondents’ terminals can be considered
a reasonable necessity to ease traffic congestion in the metropolis
 the MMDA cannot order the closure of respondents’ terminals not only because no authority to
implement the Project has been granted nor legislative or police power been delegated to it, but also
because the elimination of the terminals does not satisfy the standards of a valid police power
measure.
 Petition is, in light of the foregoing disquisition, DENIED. E.O. No. 179 is declared NULL and VOID for
being ultra vires.
Section 2 of R.A. No. 7924 specifically authorizes the MMDA to perform "planning, monitoring and coordinative
functions, and in the process exercise regulatory and supervisory authority over the delivery of metro-wide
services," including transport and traffic management. 40 Section 5 of the same law enumerates the powers and
functions of the MMDA as follows:

(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the
delivery of metro-wide services, land use and physical development within Metropolitan Manila, consistent
with national development objectives and priorities;

(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for metro-wide
services which shall indicate sources and uses of funds for priority programs and projects, and which shall
include the packaging of projects and presentation to funding institutions;

(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services
under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create appropriate
project management offices;

(d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify
bottlenecks and adopt solutions to problems of implementation;

(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and
regulate the implementation of all programs and projects concerning traffic management, specifically
pertaining to enforcement, engineering and education. Upon request, it shall be extended assistance and
cooperation, including but not limited to, assignment of personnel, by all other government agencies and offices
concerned;

(f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds
of violations of traffic rules and regulations , whether moving or non-moving in nature, and confiscate and
suspend or revoke drivers’ licenses in the enforcement of such traffic laws and regulations, the provisions of RA
4136 and PD 1605 to the contrary notwithstanding. For this purpose, the Authority shall impose all traffic laws
and regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP,
traffic enforcers of local government units, duly licensed security guards, or members of non-governmental
organizations to whom may be delegated certain authority, subject to such conditions and requirements as the
Authority may impose; and

(g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking
of delivery of basic services to the local government units, when deemed necessary subject to prior coordination
with and consent of the local government unit concerned."
ERNESTO B. FRANCISCO, JR., vs. HON. BAYANI F. FERNANDO AND MMDA

FACTS:

 Petitioner prays for the Prohibition writ to enjoin respondents Bayani F. Fernando, Chairman of the
Metropolitan Manila Development Authority (MMDA) and the MMDA from further implementing its "wet
flag scheme"

 Petitioner contends that the Flag Scheme:

o (1) has no legal basis because the MMDA’s governing body, the Metro Manila Council, did not
authorize it;

o (2) violates the Due Process Clause because it is a summary punishment for jaywalking;

o (3) disregards the Constitutional protection against cruel, degrading, and inhuman punishment;
and

o (4) violates "pedestrian rights" as it exposes pedestrians to various potential hazards

 respondents contended that the Flag Scheme is a valid preventive measure against jaywalking.

ISSUE:

whether the Flag Scheme is a reasonable enforcement of anti-jaywalking ordinances and similar enactments.

RULING:

 no legal standing

 On the Flag Scheme’s alleged lack of legal basis, we note that all the cities and municipalities within the
MMDA’s jurisdiction, except Valenzuela City, have each enacted anti-jaywalking ordinances or traffic
management codes with provisions for pedestrian regulation. Such fact serves as sufficient basis for
respondents’ implementation of schemes, or ways and means, to enforce the anti-jaywalking ordinances
and similar regulations.

 After all, the MMDA is an administrative agency tasked with the implementation of rules and regulations
enacted by proper authorities. The absence of an anti-jaywalking ordinance in Valenzuela City does not
detract from this conclusion absent any proof that respondents implemented the Flag Scheme in that city.

 Sc is not a trier of facts

 petitioner violated the doctrine of hierarchy of courts

DATU FIRDAUSI I.Y. ABBAS vs. COMMISSION ON ELECTIONS

Republic Act No. 6734, entitled "An Act Providing for an Organic Act for the Autonomous Region in Muslim
Mindanao."

FACTS:

 The arguments against R.A. 6734 raised by petitioners may generally be categorized into either of the
following:

o (a) that R.A. 6734, or parts thereof, violates the Constitution, and

o (b) that certain provisions of R.A. No. 6734 conflict with the Tripoli Agreement.

 Tripoli Agreement: agreement between the Philippines and Moro National Liberation
Front with the Participation of the Quadripartie Ministerial Commission Members of the
Islamic Conference and the Secretary General of the Organization of Islamic Conference

 provided for "the establishment of Autonomy in the southern Philippines within the realm
of the sovereignty and territorial integrity of the Republic of the Philippines" and
enumerated the thirteen (13) provinces comprising the "areas of autonomy."

 1987 Constitution: provided for regional autonomy, Article X, section 15 of the charter provides that

o "there shall be created autonomous regions in Muslim Mindanao and in the Cordilleras
consisting of provinces, cities, municipalities, and geographical areas sharing common and
distinctive historical and cultural heritage, economic and social structures, and other relevant
characteristics within the framework of this Constitution and the national sovereignty as well as
territorial integrity of the Republic of the Philippines."

 Petitioner Abbas argues that R.A. No. 6734 absolutely creates an autonomous region in Mindanao, contrary
to the aforequoted provisions of the Constitution on the autonomous region which make the creation of
such region dependent upon the outcome of the plebiscite.

o petitioner cites Article II, section 1(1) of R.A. No. 6734 which declares that "there is hereby
created the Autonomous Region in Muslim Mindanao, to be composed of provinces and cities
voting favorably in the plebiscite called for the purpose, in accordance with Section 18, Article X
of the Constitution."

o Petitioner contends that the tenor of the above provision makes the creation of an autonomous
region absolute, such that even if only two provinces vote in favor of autonomy, an autonomous
region would still be created composed of the two provinces where the favorable votes were
obtained.

 Constitution, the creation of the Autonomous region in Muslim Mindanao is made effective upon the
approval "by majority of the votes cast by the constituent units in a plebiscite called for the purpose" [Art.
X, sec. 18].

 Thus, under the Constitution and R.A. No 6734, the creation of the autonomous region shall take effect
only when approved by a majority of the votes cast by the constituent units in a plebiscite, and only
those provinces and cities where a majority vote in favor of the Organic Act shall be included in the
autonomous region.
 o The provinces and cities wherein such a majority is not attained shall not be included in the
autonomous region. It may be that even if an autonomous region is created, not all of the thirteen
(13) provinces and nine (9) cities mentioned in Article II, section 1 (2) of R.A. No. 6734 shall be
included therein.

ISSUE:

(1) whether there shall be an autonomous region in Muslim Mindanao and

(2) which provinces and cities, among those enumerated in R.A. No. 6734, shall compromise it.

RULING:

 any conflict between the provisions of R.A. No. 6734 and the provisions of the Tripoli Agreement will not
have the effect of enjoining the implementation of the Organic Act
o Thus, if at all, R.A. No. 6734 would be amendatory of the Tripoli Agreement, being a subsequent
law. Only a determination by this Court that R.A. No. 6734 contravened the Constitution would
result in the granting of the reliefs sought.

 Majority? Does it refer to…

a.) majority of the total votes cast in the plebiscite in all the constituent units

b.) majority in each of the constituent units

c.) both

 B. the will of the majority in each of the constituent units

 It is thus clear that what is required by the Constitution is a simple majority of votes
approving the organic Act in individual constituent units and not a double majority of
the votes in all constituent units put together, as well as in the individual constituent units.

 Every law has in its favor the presumption of constitutionality

 Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the
basis for such a declaration. otherwise, their petition must fail. Based on the grounds raised by petitioners
to challenge the constitutionality of R.A. No. 6734, the Court finds that petitioners have failed to overcome
the presumption.

 Petitioners also impugn the constitutionality of Article XIX, section 13 of R.A. No. 6734

“. . . Provided, That only the provinces and cities voting favorably in such plebiscite shall be
included in the Autonomous Region in Muslim Mindanao. The provinces and cities which in the
plebiscite do not vote for inclusion in the Autonomous Region shall remain in the existing
administrative regions: Provided, however, that the President may, by administrative
determination, merge the existing regions.”

o Court’s decision:

 It must be pointed out that what is referred to in R.A. No. 6734 is the merger of
administrative regions, i.e. Regions I to XII and the National Capital Region, which are
mere groupings of contiguous provinces for administrative purposes [Integrated
 Reorganization Plan (1972), which was made as part of the law of the land by Pres. dec.
No. 1, Pres. Dec. No. 742].

 Administrative regions are not territorial and political subdivisions like provinces, cities,
municipalities and barangays.

 While the power to merge administrative regions is not expressly provided for in the
Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments.

 There is no conflict between the power of the President to merge administrative regions
with the constitutional provision requiring a plebiscite in the merger of local government
units because the requirement of a plebiscite in a merger expressly applies only to
provinces, cities, municipalities or barangays, not to administrative regions.
CONGRESSMAN JAMES L. CHIONGBIAN v. HON. OSCAR M. ORBOS

FACTS:

 Pursuant to Art. X, sec.18 of the 1987 Constitution, Congress passed R.A. No. 6734, the Organic Act for
the Autonomous Region in Muslim Mindanao, calling for a plebiscite to be held in the provinces of:

o Basilan, Cotobato, Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan,
South Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte, and Zamboanga del Sur,
and the cities of Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto
Princesa and Zamboanga.

 plebiscite held on November 16, 1989, four provinces voted in favor of creating an autonomous region.
These are the provinces of

o Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi.

o In accordance with the constitutional provision, these provinces became the Autonomous Region
in Muslim Mindanao.

 Cory: Executive Order No. 429, "providing for the Reorganization of the Administrative Regions in
Mindanao."

 Petitioner’s contention:

o There is no law which authorizes the President to pick certain provinces and cities within the
existing regions — some of which did not even take part in the plebiscite as in the case of the
province of Misamis Occidental and the cities of Oroquieta, Tangub and Ozamiz — and
restructure them to new administrative regions. On the other hand, the law (Sec. 13, Art. XIX,
R.A. 6734) is specific to the point, that is, that "the provinces and cities which in the plebiscite do
not vote for inclusion in the Autonomous Region shall remain in the existing administrative
regions."

o The transfer of the provinces of

 Misamis Occidental from Region X to Region IX;

 Lanao del Norte from Region XII to Region IX,

 South Cotobato from Region XI to Region XII

 are alterations of the existing structures of governmental units, in other words,

reorganization.

o President's authority under RA 6734 to "merge existing regions" cannot

be construed to include the authority to reorganize them. To do so will
violate the rules of statutory construction.

 Petitioners in both cases contend that Art. XIX, §13 of R.A. No. 6734 is unconstitutional because
 o (1) it unduly delegates legislative power to the President by authorizing him to "merge [by
administrative determination] the existing regions" or at any rate provides no standard for the
exercise of the power delegated and

o (2) the power granted is not expressed in the title of the law.

ISSUES:

 whether the power to "merge" administrative regions is legislative in character, as petitioners contend,
or whether it is executive in character, as respondents claim

 whether Art. XIX, §13 is invalid because it contains no standard to guide the President's discretion

RULING:

 As this Court observed in Abbas, "while the power to merge administrative regions is not expressly
provided for in the Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments [see Art. X, §4 of the
Constitution]." The regions themselves are not territorial and political divisions like provinces, cities,
municipalities and barangays but are "mere groupings of contiguous provinces for administrative
purposes." The power conferred on the President is similar to the power to adjust municipal
boundarieswhich has been described in Pelaez v. Auditor General or as "administrative in nature."

 A legislative standard need not be expressed. It may simply be gathered or implied.

 With respect to the power to merge existing administrative regions, the standard is to be found in the same
policy underlying the grant to the President in R.A. No. 5435 of the power to reorganize the Executive
Department

 Reorganization: This means that while non-assenting provinces and cities are to remain in the regions as
designated upon the creation of the Autonomous Region, they may nevertheless be regrouped with
contiguous provinces forming other regions as the exigency of administration may require.

 The regrouping is done only on paper. It involves no more than are definition or redrawing of the lines
separating administrative regions for the purpose of facilitating the administrative supervision of local
government units by the President and insuring the efficient delivery of essential services. There will be no
"transfer" of local governments from one region to another except as they may thus be regrouped so that a
province like Lanao del Norte, which is at present part of Region XII, will become part of Region IX.

 The regrouping of contiguous provinces is not even analogous to a redistricting or to the division or merger
of local governments, which all have political consequences on the right of people residing in those
political units to vote and to be voted for. It cannot be overemphasized that administrative regions are mere
groupings of contiguous provinces for administrative purposes, not for political representation.

 the reorganization of administrative regions in E.O. No. 429 is based on relevant criteria, to wit:

o (1) contiguity and geographical features;

o (2) transportation and communication facilities;

o (3) cultural and language groupings;

 o (4) land area and population;

o (5) existing regional centers adopted by several agencies;

o (6) socio-economic development programs in the regions and

o (7) number of provinces and cities.

 Petitioners contend that the determination of provincial capitals has always been by act of Congress. But as,
this Court said in Abbas, administrative regions are mere "groupings of contiguous provinces for
administrative purposes, . . . They are not territorial and political subdivisions like provinces, cities,
municipalities and barangays." There is, therefore, no basis for contending that only Congress can change
or determine regional centers.
DATU MICHAEL ABAS KIDA v. SENATE OF THE PHILIPPINES

 Republic Act No. 10153, entitled "An Act Providing for the Synchronization of the Elections in the
Autonomous Region in Muslim Mindanao (ARMM) with the National and Local Elections and for
Other Purposes"

 Republic Act No. 6734 entitled "An Act Providing for an Organic Act for the Autonomous Region in
Muslim Mindanao."

 RA No. 9054 entitled "An Act to Strengthen and Expand the Organic Act for the Autonomous Region in
Muslim Mindanao, Amending for the Purpose Republic Act No. 6734, entitled An Act Providing for the
Autonomous Region in Muslim Mindanao, as Amended"

FACTS:

 The petitioners assailing RA No. 9140, RA No. 9333 and RA No. 10153 assert that these laws amend RA
No. 9054 and thus, have to comply with the supermajority vote and plebiscite requirements prescribed
under Sections 1 and 3, Article XVII of RA No. 9094 in order to become effective.

 The petitions assailing RA No. 10153 further maintain that it is unconstitutional for its failure to comply
with the three-reading requirement of Section 26(2), Article VI of the Constitution.

 petitioners challenged the grant to the President of the power to appoint OICs to undertake the functions of
the elective ARMM officials until the officials elected under the May 2013 regular elections shall have
assumed office.

ISSUE:

Whether the passage of RA No. 10153 requires a supermajority vote and plebiscite

A. Does the postponement of the ARMM regular elections constitute an amendment to Section 7,
Article XVIII of RA No. 9054?

B. Does the requirement of a supermajority vote for amendments or revisions to RA No. 9054
violate Section 1 and Section 16(2), Article VI of the 1987 Constitution and the corollary doctrine
on irrepealable laws?

C. Does the requirement of a plebiscite apply only in the creation of autonomous regions under
paragraph 2, Section 18, Article X of the 1987 Constitution?

Whether RA No. 10153 violates the autonomy granted to the ARMM

RULING:

I. Synchronization as a recognized constitutional mandate

 synchronization is used synonymously as the phrase holding simultaneously since this is the precise intent
in terminating their Office Tenure on the same day or occasion.
  “local" refers to something that primarily serves the needs of a particular limited district, often a
community or minor political subdivision.

II. The President’s Certification on the Urgency of RA No. 10153

III. A. RA No. 9333 and RA No. 10153 are not amendments to RA No. 9054

 RA No. 9054 only provides for the schedule of the first ARMM elections and does not fix the date of the
regular elections.

 subsequent laws – RA No. 9333 and RA No. 10153 – cannot be considered amendments to RA No. 9054 as
they did not change or revise any provision in the latter law; they merely filled in a gap in RA No. 9054 or
supplemented the law by providing the date of the subsequent regular elections.

III. B. Supermajority voting requirement unconstitutional for giving RA No. 9054 the character of an irrepealable
law

 Thus, while a supermajority is not a total ban against a repeal, it is a limitation in excess of what the
Constitution requires on the passage of bills and is constitutionally obnoxious because it significantly
constricts the future legislators’ room for action and flexibility.

III. C. Section 3, Article XVII of RA No. 9054 excessively enlarged the plebiscite requirement found in Section 18,
Article X of the Constitution

 With these wordings as standard, we interpret the requirement to mean that only amendments to, or
revisions of, the Organic Act constitutionally-essential to the creation of autonomous regions – i.e., those
aspects specifically mentioned in the Constitution which Congress must provide for in the Organic Act –
require ratification through a plebiscite.

 These amendments to the Organic Act are those that relate to: (a) the basic structure of the regional
government; (b) the region’s judicial system, i.e., the special courts with personal, family, and property law
jurisdiction; and, (c) the grant and extent of the legislative powers constitutionally conceded to the regional
government under Section 20, Article X of the Constitution

IV. The synchronization issue

 synchronization of national and local elections is a constitutional mandate that Congress must provide for
and this synchronization must include the ARMM elections.

 RA No. 7166 already provides for the synchronization of local elections with the national and
congressional elections.

 To achieve synchronization, Congress necessarily has to reconcile the schedule of the ARMM’s regular
elections (which should have been held in August 2011 based on RA No. 9333) with the fixed schedule of
the national and local elections (fixed by RA No. 7166 to be held in May 2013).

 Court identified the three options open to Congress in order to resolve this problem. These options are:

o (1) to allow the elective officials in the ARMM to remain in office in a hold over capacity,
pursuant to Section 7(1), Article VII of RA No. 9054, until those elected in the synchronized
elections assume office;
 o (2) to hold special elections in the ARMM, with the terms of those elected to expire when those
elected in the synchronized elections assume office; or

o (3) to authorize the President to appoint OICs, pursuant to Section 3 of RA No. 10153, also
until those elected in the synchronized elections assume office.

V. The Constitutionality of RA No. 10153

 The constitutional limitations on legislative power are either express or implied.

o The express limitations are generally provided in some provisions of the Declaration of
Principles and State Policies (Article 2) and in the provisions Bill of Rights (Article 3). Other
constitutional provisions (such as the initiative and referendum clause of Article 6, Sections 1 and
32, and the autonomy provisions of Article X) provide their own express limitations.

o The implied limitations are found "in the evident purpose which was in view and the
circumstances and historical events which led to the enactment of the particular provision as a part
of organic law."

 The totality of Sections 15 to 21 of Article X should likewise serve as a standard that Congress must
observe in dealing with legislation touching on the affairs of the autonomous regions.

o Intention of consti: the idea of self-rule or self-government

o reject the notion of imperium et imperio in the relationship between the national and the regional
governments

 In all these, the need for interim measures is dictated by necessity; out-of-the-way arrangements and
approaches were adopted or used in order to adjust to the goal or objective in sight in a manner that does
not do violence to the Constitution and to reasonably accepted norms. Under these limitations, the choice of
measures was a question of wisdom left to congressional discretion.

B. Holdover Option is Unconstitutional

 we have to remember that the rule of holdover can only apply as an available option where no express or
implied legislative intent to the contrary exists; it cannot apply where such contrary intent is evident

 Congress, in passing RA No. 10153, made it explicitly clear that it had the intention of suppressing the
holdover rule that prevailed under RA No. 9054 by completely removing this provision. The deletion is a
policy decision that is wholly within the discretion of Congress to make in the exercise of its plenary
legislative powers; this Court cannot pass upon questions of wisdom, justice or expediency of legislation,
except where an attendant unconstitutionality or grave abuse of discretion results.

C. The COMELEC has no authority to order special elections

 Another option proposed by the petitioner in G.R. No. 197282 is for this Court to compel COMELEC to
immediately conduct special elections pursuant to Section 5 and 6 of Batas Pambansa Bilang (BP) 881.

 The power to fix the date of elections is essentially legislative in nature

 Section 6 of BP 881 applies only to those situations where elections have already been scheduled but do not
take place because of (a) force majeure, (b) violence, (c) terrorism, (d) fraud, or (e) other analogous
causes the election in any polling place has not been held on the date fixed, or had been suspended
before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and
the transmission of the election returns or in the custody or canvass thereof, such election results in a
failure to elect.

 In the present case, the postponement of the ARMM elections is by law – i.e., by congressional policy –
and is pursuant to the constitutional mandate of synchronization of national and local elections.

D. The Court has no power to shorten the terms of elective officials

 Based on the Constitution, the power to fix the term of office of elective officials, which can be exercised
only in the case of barangay officials, is specifically given to Congress. Even Congress itself may be denied
such power, as shown when the Constitution shortened the terms of twelve Senators obtaining the least
votes, and extended the terms of the President and the Vice-President in order to synchronize elections;
Congress was not granted this same power.

 Neither we nor Congress can opt to shorten the tenure of those officials to be elected in the ARMM
elections instead of acting on their term (where the "term" means the time during which the officer may
claim to hold office as of right and fixes the interval after which the several incumbents shall succeed one
another, while the "tenure" represents the term during which the incumbent actually holds the office).

E. The President’s Power to Appoint OICs

 the power to appoint is essentially executive in nature, and the limitations on or qualifications to the
exercise of this power should be strictly construed; these limitations or qualifications must be clearly stated
in order to be recognized.

 four groups the officers that the President can appoint

o First, the heads of the executive departments; ambassadors; other public ministers and consuls;
officers of the Armed Forces of the Philippines, from the rank of colonel or naval captain; and
other officers whose appointments are vested in the President in this Constitution;

o Second, all other officers of the government whose appointments are not otherwise provided for
by law

o Third, those whom the President may be authorized by law to appoint; and

o Fourth, officers lower in rank whose appointments the Congress may by law vest in the President
alone.

 RA No. 10153, however, does not in any way amend what the organic law of the ARMM (RA No. 9054)
sets outs in terms of structure of governance. What RA No. 10153 in fact only does is to "appoint officers-
in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional
Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly
elected in the May 2013 elections shall have qualified and assumed office."

 RA No. 10153, in fact, provides only for synchronization of elections and for the interim measures that
must in the meanwhile prevail.
  Viewed from another perspective, synchronization will temporarily disrupt the election process in a local
community, the ARMM, as well as the community’s choice of leaders, but this will take place under a
situation of necessity and as an interim measure in the manner that interim measures have been adopted and
used in the creation of local government units and the adjustments of sub-provinces to the status of
provinces.

o These measures, too, are used in light of the wider national demand for the synchronization of
elections (considered vis-à-vis the regional interests involved). The adoption of these measures, in
other words, is no different from the exercise by Congress of the inherent police power of the
State, where one of the essential tests is the reasonableness of the interim measure taken in light of
the given circumstances.

 the "representative" character of the chosen leaders need not necessarily be affected by the appointment of
OICs as this requirement is really a function of the appointment process; only the "elective" aspect shall be
supplanted by the appointment of OICs.

VI. Other Constitutional Concerns

 This claim apparently misunderstands that an across-the-board cancellation of elections is a matter for
Congress, not for the President, to address. It is a power that falls within the powers of Congress in the
exercise of its legislative powers. Even Congress, as discussed above, is limited in what it can legislatively
undertake with respect to elections.

 Significantly, the grant to the President of the power to appoint OICs to undertake the functions of the
elective members of the Regional Legislative Assembly is neither novel nor innovative.

 It may be noted that under Commonwealth Act No. 588 and the Revised Administrative Code of 1987, the
President is empowered to make temporary appointments in certain public offices, in case of any vacancy
that may occur. Albeit both laws deal only with the filling of vacancies in appointive positions.

 The respondents contend that the provincial board is the correct appointing power.

o As between the President who has supervision over local governments as provided by law and the
members of the board who are junior to the vice-governor, we have no problem ruling in favor of
the President, until the law provides otherwise.

B. Autonomy in the ARMM

 Petitioner’s contention: one would presume that there exists a conflict between two recognized
Constitutional mandates – synchronization and regional autonomy – such that it is necessary to choose one
over the other.

o We find this to be an erroneous approach that violates a basic principle in constitutional

construction – ut magis valeat quam pereat: that the Constitution is to be interpreted as a whole,
and one mandate should not be given importance over the other except where the primacy of one
over the other is clear.

 Elsewhere, it has also been argued that the ARMM elections should not be synchronized with the national
and local elections in order to maintain the autonomy of the ARMM and insulate its own electoral
processes from the rough and tumble of nationwide and local elections. This argument leaves us far from
convinced of its merits.
 o while autonomous regions are granted political autonomy, the framers of the Constitution never
equated autonomy with independence. The ARMM as a regional entity thus continues to operate
within the larger framework of the State and is still subject to the national policies set by the
national government, save only for those specific areas reserved by the Constitution for regional
autonomous determination.

 Mr. Bennagen.: We do not see here a complete separation from the central government, but rather an
efficient working relationship between the autonomous region and the central government. We see this as
an effective partnership, not a separation.

o Automous region: a measure of self-government within the larger political framework of the
nation

 Under the Philippine concept of local autonomy, the national government has not completely relinquished
all its powers over local governments, including autonomous regions. Only administrative powers over
local affairs are delegated to political subdivisions. The purpose of the delegation is to make governance
more directly responsive and effective at the local levels. In turn, economic, political and social
development at the smaller political units are expected to propel social and economic growth and
development. But to enable the country to develop as a whole, the programs and policies effected locally
must be integrated and coordinated towards a common national goal. Thus, policy-setting for the entire
country still lies in the President and Congress.

 the autonomy granted to the ARMM cannot be invoked to defeat national policies and concerns. Since the
synchronization of elections is not just a regional concern but a national one, the ARMM is subject to it; the
regional autonomy granted to the ARMM cannot be used to exempt the region from having to act in
accordance with a national policy mandated by no less than the Constitution.

Conclusion

 Congress acted within its powers and pursuant to a constitutional mandate – the synchronization of national
and local elections – when it enacted RA No. 10153. This Court cannot question the manner by which
Congress undertook this task; the Judiciary does not and cannot pass upon questions of wisdom, justice or
expediency of legislation. As judges, we can only interpret and apply the law and, despite our doubts about
its wisdom, cannot repeal or amend it.

 We find that Congress, in passing RA No. 10153, acted strictly within its constitutional mandate. Given an
array of choices, it acted within due constitutional bounds and with marked reasonableness in light of the
necessary adjustments that synchronization demands. Congress, therefore, cannot be accused of any
evasion of a positive duty or of a refusal to perform its duty.

 On the general claim that RA No. 10153 is unconstitutional, we can only reiterate the established rule that
every statute is presumed valid. Congress, thus, has in its favor the presumption of constitutionality of its
acts, and the party challenging the validity of a statute has the onerous task of rebutting this presumption.
Cordillera Regional Assembly Member ALEXANDER P. ORDILLO v. COMMISSION ON ELECTIONS

FACTS:

 the people of the provinces of Benguet, Mountain Province, Ifugao, Abra and Kalinga-Apayao and the city
of Baguio cast their votes in a plebiscite held pursuant to Republic Act No. 6766 entitled "An Act Providing
for an Organic Act for the Cordillera Autonomous Region."

o results of the plebiscite:

 approved by a majority of 5,889 votes in only the Ifugao Province

 rejected by 148,676 votes in the rest of the provinces and city

 COMELEC, on February 14, 1990, issued Resolution No. 2259 stating that the Organic Act for the Region
has been approved and/or ratified by majority of the votes cast only in the province of Ifugao

 Congress enacted Republic Act No. 6861 setting the elections in the Cordillera Autonomous Region of
Ifugao on the first Monday of March 1991

 petitioner filed a petition with COMELEC to declare the non-ratification of the Organic Act for the Region.

 The petitioners maintain that there can be no valid Cordillera Autonomous Region in only one province as
the Constitution and Republic Act No. 6766 require that the said Region be composed of more than one
constituent unit.

ISSUE:

whether or not the province of Ifugao, being the only province which voted favorably for the creation of the
Cordillera Autonomous Region can, alone, legally and validly constitute such Region.

RULING:

 The sole province of Ifugao cannot validly constitute the Cordillera Autonomous Region
 The keywords — provinces, cities, municipalities and geographical areas connote that "region" is to be
made up of more than one constituent unit.
o The term "region" used in its ordinary sense means two or more provinces.
 Ifugao is a province by itself. To become part of a region, it must join other provinces, cities,
municipalities, and geographical areas. It joins other units because of their common and distinctive
historical and cultural heritage, economic and social structures and other relevant characteristics.
 Aside from the 1987 Constitution, a reading of the provisions of Republic Act No. 6766 strengthens the
petitioner's position that the Region cannot be constituted from only one province.
o it can be gleaned that Congress never intended that a single province may constitute the
autonomous region.
 To contemplate the situation envisioned by the respondent would not only violate the letter and intent of the
Constitution and Republic Act No. 6766 but would also be impractical and illogical.
  Our decision in Abbas, et al. v. COMELEC, is not applicable in the case at bar contrary to the view of the
Secretary of Justice.
 The Abbas case laid down the rate on the meaning of majority in the phrase "by majority of the votes cast
by the constituent units called for the purpose" found in the Constitution, Article X, Section 18. It stated:
 x x x
 ". . . [I]t is thus clear that what is required by the Constitution is simple majority of votes approving the
Organic Act in individual constituent units and not a double majority of the votes in all constituent units put
together, as well as in the individual constituent units."
 Resolution No. 2259 of the Commission on Elections, insofar as it upholds the creation of an autonomous
region, the February 14, 1990 memorandum of the Secretary of Justice, the February 5, 1990 memorandum
of the Executive Secretary, Administrative Order No. 160, and Republic Act No. 6861 are declared null and
void
CORDILLERA BROAD COALITION, vs. COMMISSION ON AUDIT
FACTS:
 the constitutionality of Executive Order No. 220, dated July 15, 1987, which created the (Cordillera
Administrative Region, is assailed on the primary ground that it pre-empts the enactment of an
organic act by the Congress and the creation of' the autonomous region in the Cordilleras conditional
on the approval of the act through a plebiscite.
 Executive Order No. 220, issued by the President in the exercise of her legislative powers under Art. XVIII,
sec. 6 of the 1987 Constitution, created the Cordillera Administrative Region (CAR) , which covers the
provinces of Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain Province and the City of Baguio [secs.
1 and 2].
o main function: is to coordinate the planning and implementation of programs and services in the
region, particularly, to coordinate with the local government units as well as with the executive
departments of the National Government in the supervision of field offices and in identifying,
planning, monitoring, and accepting projects and activities in the region [sec. 5].
 CAR shall have a Cordillera Regional Assembly as a policy-formulating body and a Cordillera
Executive Board as an implementing arm [secs. 7, 8 and 10]
 petitioners principally argue that by issuing E.O. No. 220 the President, in the exercise of her legislative
powers prior to the convening of the first Congress under the 1987 Constitution, has virtually pre-empted
Congress from its mandated task of enacting an organic act and created an autonomous region in the
Cordilleras.
ISSUE:
Whether or not the EO No. 220 is unconstitutional.
RULING:

 It is well-settled in our jurisprudence that respect for the inherent and stated powers and prerogatives of the
law-making body, as well as faithful adherence to the principle of separation of powers, require that its
enactment be accorded the presumption of constitutionality. Thus, in any challenge to the constitutionality
of a statute, the burden of clearly and unequivocally proving its unconstitutionality always rests upon the
challenger. Conversely, failure to so prove will necessarily defeat the challenge.

 E.O. No. 220 will easily reveal that what it actually envisions is the consolidation and coordination of the
delivery of services of line departments and agencies of the National Government in the areas covered by
the administrative region as a step preparatory to the grant of autonomy to the Cordilleras.
o It does not create the autonomous region contemplated in the Constitution.
 o It merely provides for transitory measures in anticipation of the enactment of an organic act and
the creation of an autonomous region. In short, it prepares the ground for autonomy.
o This does not necessarily conflict with the provisions of the Constitution on autonomous regions
 the transitory nature of the CAR does not necessarily mean that it is, as petitioner Cordillera Broad
Coalition asserts, "the interim autonomous region in the Cordilleras"
 we find that E.O. No. 220 did not establish an autonomous regional government.
 Cordillera Executive Board composed of the
o Mayor of Baguio City,
o provincial governors and
o representatives of the Cordillera Bodong Administration,
o ethno-linguistic groups and
o non-governmental organizations as regular members and
o all regional directors of the line departments of the National Government as ex-officio members
and
 headed by an Executive Director

 The bodies created by E.O. No. 220 do not supplant the existing local
governmental structure, nor are they autonomous government agencies. They
merely constitute the mechanism for an "umbrella" that brings together the
existing local governments, the agencies of the National Government, the ethno-
linguistic groups or tribes, and non-governmental organizations in a concerted
effort to spur development in the Cordilleras.

 After carefully considering the provisions of E.O. No. 220, we find that it did not create a new territorial
and political subdivision or merge existing ones into a larger subdivision.

 CAR is not a public corporation or a territorial and political subdivision. It does not have a separate
juridical personality, unlike provinces, cities and municipalities.
o Neither is it vested with the powers that are normally granted to public corporations, e.g. the
power to sue and be sued, the power to own and dispose of property, the power to create its own
sources of revenue, etc.

 We can readily see that the CAR is in the same genre as the administrative regions created under the
Reorganization Plan, albeit under E.O. No. 220 the operation of the CAR requires the participation not only
of the line departments and agencies of the National Government but also the local governments, ethno-
linguistic groups and non-governmental organizations in bringing about the desired objectives and the
appropriation of funds solely for that purpose.

o CAR may be considered more than anything else as a regional coordinating agency of the
National Government, similar to the regional development councils which the President may
create under the Constitution
 It must be clarified that the constitutional guarantee of local autonomy in the Constitution [Art. X, sec. 2]
refers to the administrative autonomy of local government units or, cast in more technical language, the
decentralization of government authority
 the creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is peculiar to the 1987
Constitution contemplates the grant of political autonomy and not just administrative autonomy these
regions.
SENATOR HEHERSON T. ALVAREZ v. HON. TEOFISTO T. GUINGONA, JR
FACTS:

 the Act allegedly did not originate exclusively in the House of Representatives as mandated by Section 24,
Article VI of the 1987 Constitution.

 petitioners claim that the Municipality of Santiago has not met the minimum average annual income
required under Section 450 of the Local Government Code of 1991 in order to be converted into a
component city.
 2 versions for the conversion:
o HB No. 8817, entitled "An Act Converting the Municipality of Santiago into an Independent
Component City to be known as the City of Santiago,"
o Senate Bill No. 1243, entitled, "An Act Converting the Municipality of Santiago into an
Independent Component City to be Known as the City of Santiago,"
 Petitioners claim that Santiago could not qualify into a component city because its average annual income
for the last two (2) consecutive years based on 1991 constant prices falls below the required annual income
of Twenty Million Pesos (P20,000,000.00) for its conversion into a city

o the average annual income arrived at would only be P13,109,560.47 based on the 1991 constant
prices

o The certification issued by the Bureau of Local Government Finance of the Department of
Finance, which indicates Santiago's average annual income to be P20,974,581.97, is allegedly not
accurate as the Internal Revenue Allotments were not excluded from the computation.
o Petitioners asseverate that the IRAs are not actually income but transfers and/or budgetary
aid from the national government and that they fluctuate, increase or decrease, depending on
factors like population, land and equal sharing.
ISSUE:
Republic Act No. 7720 is constitutional
"An Act Converting the Municipality of Santiago, Isabela into an Independent Component City to be known as the
City of Santiago,"
(I) Whether or not the Internal Revenue Allotments (IRAs) are to be included in the computation of the
average annual income of a municipality for purposes of its conversion into an independent component
city, and
(II) Whether or not, considering that the Senate passed SB No. 1243, its own version of HB No. 8817,
Republic Act No. 7720 can be said to have originated in the House of Representatives.
RULING:

The annual income of a local government unit includes the IRAs

 Internal Revenue Allotments form part of the income of Local Government Units.

 It is true that for a municipality to be converted into a component city, it must, among others, have an
average annual income of at least Twenty Million Pesos for the last two (2) consecutive years based on
1991 constant prices. Such income must be duly certified by the Department of Finance.
  A Local Government Unit is a political subdivision of the State which is constituted by law and possessed
of substantial control over its own affairs.

o Remaining to be an intra sovereign subdivision of one sovereign nation, but not intended,
however, to be an imperium in imperio, the local government unit is autonomous in the sense
that it is given more powers, authority, responsibilities and resources.

o Power which used to be highly centralized in Manila, is thereby deconcentrated, enabling

especially the peripheral local government units to develop not only at their own pace and
discretion but also with their own resources and assets.

 Availment of financial resources is effectuated through the vesting in every local government unit of
o (1) the right to create and broaden its own source of revenue;
o (2) the right to be allocated a just share in national taxes, such share being in the form of internal
revenue allotments (IRAs); and
o (3) the right to be given its equitable share in the proceeds of the utilization and development of
the national wealth, if any, within its territorial boundaries.
 The funds generated from local taxes, IRAs and national wealth utilization proceeds accrue to the general
fund of the local government and are used to finance its operations subject to specified modes of spending
the same as provided for in the Local Government Code and its implementing rules and regulations.
 Income: to be all revenues and receipts collected or received forming the gross accretions of funds of the
local government unit.
 IRAs are items of income because they form part of the gross accretion of the funds of the local
government unit.
o The IRAs regularly and automatically accrue to the local treasury without need of any further
action on the part of the local government unit.
 Section 450 (c) of the Local Government Code provides that "the average annual income shall include the
income accruing to the general fund, exclusive of special funds, transfers, and non-recurring income."
o IRAs are a regular, recurring item of income

In the enactment of RA No. 7720, there was compliance with Section 24, Article VI of the 1987 Constitution

 No violation of Section 24, Article VI, of the 1987 Constitution is perceptible under the circumstances
attending the instant controversy.

 The filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the House, does not
contravene the constitutional requirement that a bill of local application should originate in the House of
Representatives, for as long as the Senate does not act thereupon until it receives the House bill.

 Every law, including RA No. 7720, has in its favor the presumption of constitutionality

 for RA No. 7720 to be nullified, it must be shown that there is a clear and unequivocal breach of the
Constitution, not merely a doubtful and equivocal one; in other words, the grounds for nullity must be clear
and beyond reasonable doubt.
AQUILINO Q. PIMENTEL JR., vs. Hon. ALEXANDER AGUIRRE
FACTS:

 Petitioner contends that the President, in issuing AO 372, was in effect exercising the power of control over
LGUs.

o The Constitution vests in the President, however, only the power of general supervision over
LGUs, consistent with the principle of local autonomy.

 Petitioner further argues that the directive to withhold ten percent (10%) of their IRA is in contravention of
Section 286 of the Local Government Code and of Section 6, Article X of the Constitution, providing for
the automatic release to each of these units its share in the national internal revenue.

 The solicitor general, on behalf of the respondents, claims on the other hand that AO 372 was issued to
alleviate the "economic difficulties brought about by the peso devaluation" and constituted merely an
exercise of the President's power of supervision over LGUs.

o It allegedly does not violate local fiscal autonomy, because it merely directs local governments
to identify measures that will reduce their total expenditures for non-personal services by at
least 25 percent.

 The solicitor general insists, however, that AO 372 is merely directory and has been issued by the
President consistent with his power of supervision over local governments.

o It is intended only to advise all government agencies and instrumentalities to undertake cost-
reduction measures that will help maintain economic stability in the country, which is facing
economic difficulties.

o Besides, it does not contain any sanction in case of noncompliance.

ISSUE:

whether (a) Section 1 of AO 372, insofar as it "directs" LGUs to reduce their expenditures by 25 percent; and (b)
Section 4 of the same issuance, which withholds 10 percent of their internal revenue allotments, are valid exercises
of the President's power of general supervision over local governments.

RULING:

Scope of President's Power of Supervision Over LGUs

 To exclude the power of control

 supervision means overseeing or the power or authority of an officer to see that subordinate officers
perform their duties.

o If the latter fail or neglect to fulfill them, the former may take such action or step as prescribed by
law to make them perform their duties.

 Control, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer
has done in the performance of his duties and to substitute the judgment of the former for that of the latter."
 o Officers in control lay down the rules in the performance or accomplishment of an act. If these
rules are not followed, they may, in their discretion, order the act undone or redone by their
subordinates or even decide to do it themselves

 Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it
does not include any restraining authority over such body

o Supervising officials merely see to it that the rules are followed, but they themselves do not lay
down such rules, nor do they have the discretion to modify or replace them. If the rules are not
observed, they may order the work done or redone, but only to conform to such rules. They may
not prescribe their own manner of execution of the act. They have no discretion on this matter
except to see to it that the rules are followed.

Extent of Local Autonomy

 local autonomy signified "a more responsive and accountable local government structure instituted through
a system of decentralization."
o The grant of autonomy is intended to "break up the monopoly of the national government over the
affairs of local governments, x x x not x x x to end the relation of partnership and interdependence
between the central administration and local government units x x x."
 Decentralization simply means the devolution of national administration, not power, to local governments.
o Local officials remain accountable to the central government as the law may provide.
o decentralization of administration
 when the central government delegates administrative powers to political subdivisions in
order to broaden the base of government power and in the process to make local
governments 'more responsive and accountable,' and 'ensure their fullest development as
self-reliant communities and make them more effective partners in the pursuit of national
development and social progress.
 it relieves the central government of the burden of managing local affairs and enables it to
concentrate on national concerns.
 The President exercises 'general supervision' over them, but only to 'ensure that local
affairs are administered according to law
o decentralization of power
 involves an abdication of political power in the favor of local government units declared
to be autonomous.
 the autonomous government is free to chart its own destiny and shape its future with
minimum intervention from central authorities.
 amounts to 'self-immolation,' since in that event, the autonomous government becomes
accountable not to the central authorities but to its constituency
 Only administrative powers over local affairs are delegated to political subdivisions. The purpose of the
delegation is to make governance more directly responsive and effective at the local levels.

The Nature of AO 372

  Fiscal autonomy means that local governments have the power to create their own sources of revenue in
addition to their equitable share in the national taxes released by the national government, as well as the
power to allocate their resources in accordance with their own priorities.
 There are therefore several requisites before the President may interfere in local fiscal matters:
o (1) an unmanaged public sector deficit of the national government;
o (2) consultations with the presiding officers of the Senate and the House of Representatives and
the presidents of the various local leagues; and
o (3) the corresponding recommendation of the secretaries of the Department of Finance, Interior
and Local Government, and Budget and Management.
 Being merely an advisory, therefore, Section 1 of AO 372 is well within the powers of the President. Since
it is not a mandatory imposition, the directive cannot be characterized as an exercise of the power of
control.

 Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the
LGUs' IRA "pending the assessment and evaluation by the Development Budget Coordinating Committee
of the emerging fiscal situation" in the country. Such withholding clearly contravenes the Constitution and
the law. Although temporary, it is equivalent to a holdback, which means "something held back or withheld,
often temporarily." Hence, the "temporary" nature of the retention by the national government does not
matter. Any retention is prohibited.

Withholding a Part of LGUs' IRA

 the release shall be made directly to the LGU concerned within five (5) days after every quarter of the year
and "shall not be subject to any lien or holdback that may be imposed by the national government for
whatever purpose."
 As a rule, the term "shall" is a word of command that must be given a compulsory meaning
 Respondents and their successors are hereby permanently PROHIBITED from implementing
Administrative Order Nos. 372 and 43, respectively

o ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998

THE PROVINCE OF BATANGAS v. HON. ALBERTO G. ROMULO
FACTS:
 President Joseph Ejercito Estrada issued Executive Order (E.O.) No. 48 entitled "ESTABLISHING A
PROGRAM FOR DEVOLUTION ADJUSTMENT AND EQUALIZATION."
o "facilitate the process of enhancing the capacities of local government units (LGUs) in the
discharge of the functions and services devolved to them by the National Government Agencies
concerned pursuant to the Local Government Code."

 Petitioner: to declare as unconstitutional and void certain provisos contained in the General
Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly earmarked for each
corresponding year the amount of five billion pesos (₱5,000,000,000.00) of the Internal Revenue Allotment
(IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed conditions for the
release thereof.

o The LGSEF in the GAA of 1999

 the amount of ₱96,780,000,000 was allotted as the share of the LGUs in the internal
revenue taxes

o The LGSEF in the GAA of 2000

 the amount of ₱111,778,000,000 was allotted as the share of the LGUs in the internal
revenue taxes.

o The LGSEF in the GAA of 2001

 In view of the failure of Congress to enact the general appropriations law for 2001, the
GAA of 2000 was deemed re-enacted, together with the IRA of the LGUs therein and the
proviso earmarking five billion pesos thereof for the LGSEF.

 The petitioner now comes to this Court assailing as unconstitutional and void the provisos in the GAAs of
1999, 2000 and 2001, relating to the LGSEF. Similarly assailed are the Oversight Committee's Resolutions
o It violate the Constitution and the Local Government Code of 1991.

o Section 6, Article X of the Constitution is invoked as it mandates that the "just share" of the LGUs
shall be automatically released to them.

o Sections 18 and 286 of the Local Government Code of 1991, which enjoin that the "just share" of
the LGUs shall be "automatically and directly" released to them "without need of further action"
are, likewise, cited.

 The petitioner posits that to subject the distribution and release of the five-billion-peso portion of the IRA,
classified as the LGSEF, to compliance by the LGUs with the implementing rules and regulations,
including the mechanisms and guidelines prescribed by the Oversight Committee, contravenes the explicit
directive of the Constitution that the LGUs' share in the national taxes "shall be automatically released to
them."

o The petitioner maintains that the use of the word "shall" must be given a compulsory
meaning.
  Petitioner’s contention: OCD resolutions is the improper amendment to Section 285 of the Local
Government Code of 1991 on the percentage sharing of the IRA among the LGUs. Said provision allocates
the IRA as follows: Provinces – 23%; Cities – 23%; Municipalities – 34%; and Barangays – 20%

 The respondents advance the view that Section 6, Article X of the Constitution does not specify that the
"just share" of the LGUs shall be determined solely by the Local Government Code of 1991.
o the phrase "as determined by law" in the same constitutional provision means that there exists no
limitation on the power of Congress to determine what is the "just share" of the LGUs in the
national taxes
 Under the assailed provisos in the GAAs of 1999, 2000 and 2001, a portion of the IRA in the amount of
five billion pesos was earmarked for the LGSEF, and these provisos imposed the condition that "such
amount shall be released to the local government units subject to the implementing rules and regulations,
including such mechanisms and guidelines for the equitable allocations and distribution of said fund among
local government units subject to the guidelines that may be prescribed by the Oversight Committee on
Devolution."
o Significantly, the LGSEF could not be released to the LGUs without the Oversight Committee's
prior approval
 the Oversight Committee, through the assailed OCD resolutions, laid down guidelines and mechanisms that
the LGUs had to comply with before they could avail of funds from this portion of the LGSEF. The
guidelines required
o (a) the LGUs to identify the projects eligible for funding based on the criteria laid down by the
Oversight Committee;
o (b) the LGUs to submit their project proposals to the DILG for appraisal;
o (c) the project proposals that passed the appraisal of the DILG to be submitted to the Oversight
Committee for review, evaluation and approval.
ISSUE:

Whether or not General Appropriations Acts of 1999, 2000 and 2001, and the assailed OCD Resolutions,
are UNCONSTITUTIONAL.

RULING:
 the LGUs have no vested right in a permanent or fixed percentage as Congress may increase or decrease
the "just share" of the LGUs in accordance with what it believes is appropriate for their operation. There is
nothing in the Constitution which prohibits Congress from making such determination through the
appropriations laws

 A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the National
internal revenue. This is mandated by no less than the Constitution. The Local Government Code specifies
further that the release shall be made directly to the LGU concerned within five (5) days after every quarter
of the year and "shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose." As a rule, the term "SHALL" is a word of command that must be given
a compulsory meaning. The provision is, therefore, IMPERATIVE.

 To the Court's mind, the entire process involving the distribution and release of the LGSEF is
constitutionally impermissible. The LGSEF is part of the IRA or "just share" of the LGUs in the national
taxes. To subject its distribution and release to the vagaries of the implementing rules and regulations,
including the guidelines and mechanisms unilaterally prescribed by the Oversight Committee from time to
time, as sanctioned by the assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions,
makes the release not automatic, a flagrant violation of the constitutional and statutory mandate that the
 "just share" of the LGUs "shall be automatically released to them." The LGUs are, thus, placed at the mercy
of the Oversight Committee.

 as correctly posited by the petitioner, the use of the word "shall" connotes a mandatory order. Its use in a
statute denotes an imperative obligation and is inconsistent with the idea of discretion.

Local autonomy
 local autonomy 'means a more responsive and accountable local government structure instituted through a
system of decentralization.'
 The Constitution, as we observed, does nothing more than to break up the monopoly of the national
government over the affairs of local governments and as put by political adherents, to "liberate the local
governments from the imperialism of Manila."

 Autonomy, however, is not meant to end the relation of partnership and interdependence between the
central administration and local government units, or otherwise, to usher in a regime of federalism. The
Charter has not taken such a radical step. Local governments, under the Constitution, are subject to
regulation, however limited, and for no other purpose than precisely, albeit paradoxically, to enhance self-
government.

 decentralization means devolution of national administration – but not power – to the local levels

 autonomy is either decentralization of administration or decentralization of power.

o Decentralization of administration: when the central government delegates administrative

powers to political subdivisions in order to broaden the base of government power and in the
process to make local governments 'more responsive and accountable' and 'ensure their fullest
development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress.'

 At the same time, it relieves the central government of the burden of managing local
affairs and enables it to concentrate on national concerns.

 The President exercises 'general supervision' over them, but only to 'ensure that local
affairs are administered according to law.'

 He has no control over their acts in the sense that he can substitute their judgments with
his own.

o Decentralization of power: involves a relinquishment of political power in the favor of local

governments units declared to be autonomous.

 In that case, the autonomous government is free to chart its own destiny and shape
its future with minimum intervention from central authorities.

 According to a constitutional author, decentralization of power amounts to 'self-

immolation,' since in that event, the autonomous government becomes accountable not
to the central authorities but to its constituency.

 Local autonomy includes both administrative and fiscal autonomy

 o Fiscal autonomy means that local governments have the power to create their own sources of
revenue in addition to their equitable share in the national taxes released by the national
government, as well as the power to allocate their resources in accordance with their own
priorities. It extends to the preparation of their budgets, and local officials in turn have to work
within the constraints thereof.
 basic feature of local fiscal autonomy is the constitutionally mandated automatic release
of the shares of LGUs in the national internal revenue.
 The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions cannot amend Section
285 of the Local Government Code of 1991 Section 284 of the Local Government Code provides that,
beginning the third year of its effectivity, the LGUs' share in the national internal revenue taxes shall be
40%. This percentage is fixed and may not be reduced except "in the event the national government incurs
an unmanageable public sector deficit"
o the only possible exception to the mandatory automatic release of the LGUs' IRA is if the
national internal revenue collections for the current fiscal year is less than 40 percent of the
collections of the preceding third fiscal year, in which case what should be automatically
released shall be a proportionate amount of the collections for the current fiscal year.

 Sec. 285. Allocation to Local Government Units. – The share of local government units in the internal
revenue allotment shall be allocated in the following manner:

o (a) Provinces – Twenty-three (23%)

o (b) Cities – Twenty-three percent (23%);

o (c) Municipalities – Thirty-four (34%); and

o (d) Barangays – Twenty percent (20%).

 The Local Government Code of 1991 is a substantive law

o And while it is allowed that Congress may amend any of the provisions therein, it may not do so
through appropriations laws or GAAs.
o Any amendment to the Local Government Code of 1991 should be done in a separate law, not in
the appropriations law, because Congress cannot include in a general appropriation bill matters
that should be more properly enacted in a separate legislation
 A general appropriations bill is a special type of legislation, whose content is limited to
specified sums of money dedicated to a specific purpose or a separate fiscal unit. Any
provision therein which is intended to amend another law is considered an
"inappropriate provision."
 The category of "inappropriate provisions" includes unconstitutional provisions
and provisions which are intended to amend other laws, because clearly these
kinds of laws have no place in an appropriations bill
 Indeed, the value of local governments as institutions of democracy is measured by the degree of autonomy
that they enjoy.

 . The assailed provisos in the General Appropriations Acts of 1999, 2000 and 2001, and the assailed OCD
Resolutions, are declared UNCONSTITUTIONAL.
MAYOR HADJI AMER R. SAMPIANO v. JUDGE CADER P. INDAR
FACTS:
 Sampiano filed before the Commission on Elections a Petition for Annulment of Proclamation with Prayer
for Preliminary Injunction/TRO against his rival mayoralty candidate, his uncle Ogka, and the Municipal
Board of Canvassers of Balabagan, Lanao del Sur composed of Vadria Pungginagina and Zenaida Mante
 Comelec issued an order authorizing the vice-mayor to temporarily assume the duties and responsibilities
as mayor due to the double proclamation of Sampiano and Ogka for the position of mayor
 Ogka informed in writing, the Chief Legal Counsel of PNB, Atty. Alvin C. Go, and asked him not to release
the IRA (Internal Revenue Allotment which is the share of the local government unit in national internal
revenue taxes) for the Municipality of Balabagan, Lanao del Sur until the controversy involving the
mayorship of the said municipality now pending with the Comelec shall have been finally resolved.
 However, on the basis of the Comelec Order dated September 9, 2004, Go directed PNB-Marawi to release
the July, August, and September 2004 IRA for the Municipality of Balabagan, Lanao del Sur to Sampiano
and Macabato (the Municipal Treasurer).
 Sampiano claimed that the October 11, 2004 Order "SUPER ORDER" (ex-parte issuance) was issued in
violation of Section 286 of the Local Government Code (LGC), which provides for the automatic release of
the share of the local government unit from the national government
o Sampiano prayed that respondent Judge be dismissed from judicial service for gross ignorance of
the law, grave abuse of authority, manifest partiality and serious acts of impropriety

 respondent believes that the provision on the automatic release of IRA is not a shield or immunity to the
authority of the courts to interfere, interrupt or suspend its release when there is a legal question presented
before it in order to determine the rights of the parties concerned.

ISSUE:

whether petitioner is entitled to the issuance of TRO and later, a permanent injunction to hold the release of the IRA
to Hadji R. Sampiano or to any person acting in his behalf considering that petitioner is also a holder of [a]
"COMELEC" proclamation.

RULING:

 the automatic release of the IRA under Section 286 is a mandate to the national government through the
Department of Budget and Management to effect automatic release of the said funds from the treasury
directly to the local government unit, free from any holdbacks or liens imposed by the national government.
However, this automatic release of the IRA from the national treasury does not prevent the proper court
from deferring or suspending the release thereof to particular local officials when there is a legal question
presented in the court pertaining to the rights of the parties to receive the IRA or to the propriety of the
issuance of a TRO or a preliminary injunction while such rights are still being determined.

 We agree with the findings of the OCA that the October 11, 2004 Order is essentially a preliminary
injunction order, and that the respondent Judge failed to comply with the provisions of Section 5, Rule 58
of the Rules of Court.
AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON ALCANTARA v. EXECUTIVE
SECRETARY PAQUITO N. OCHOA and SECRETARY CORAZON JULIANO-SOLIMAN OF THE DSWD

FACTS:

 Conditional Cash Transfer

o "Pantawid Pamilyang Pilipino Program" (4Ps)

 Congress, sought to ensure the success of the CCTP by providing it with funding under the GAA of 2008 in
the amount of P298,550,000.00. This budget allocation increased tremendously to P5 Billion Pesos in 2009,
with the amount doubling to P10 Billion Pesos in 2010. But the biggest allotment given to the CCTP was in
the GAA of 2011 at P21,194,117,000.00).

 Petitioner Aquilino Pimentel, Jr., challenges the disbursement of public funds and the implementation of the
CCTP which are alleged to have encroached into the local autonomy of the LGUs.

 Petitioners assert that giving the DSWD full control over the identification of beneficiaries and the manner
by which services are to be delivered or conditionalities are to be complied with, instead of allocating the
P21 Billion CCTP Budget directly to the LGUs that would have enhanced its delivery of basic services,
results in the "recentralization" of basic government functions, which is contrary to the precepts of local
autonomy and the avowed policy of decentralization.

ISSUE:

constitutionality of certain provisions of Republic Act No. 10147 or the General Appropriations Act (GAA) of
2011which provides a P21 Billion budget allocation for the Conditional Cash Transfer Program (CCTP) headed by
the Department of Social Welfare & Development

RULING:

 Under the Philippine concept of local autonomy, the national government has not completely relinquished
all its powers over local governments, including autonomous regions. Only administrative powers over
local affairs are delegated to political subdivisions. The purpose of the delegation is to make governance
more directly responsive and effective at the local levels. In turn, economic, political and social
development at the smaller political units are expected to propel social and economic growth and
development. But to enable the country to develop as a whole, the programs and policies effected locally
must be integrated and coordinated towards a common national goal. Thus, policy-setting for the entire
country still lies in the President and Congress.

 Indeed, a complete relinquishment of central government powers on the matter of providing basic facilities
and services cannot be implied as the Local Government Code itself weighs against it. The national
government is, thus, not precluded from taking a direct hand in the formulation and implementation of
national development programs especially where it is implemented locally in coordination with the LGUs
concerned.

 The allocation of a P21 billion budget for an intervention program formulated by the national government
itself but implemented in partnership with the local government units to achieve the common national goal
development and social progress can by no means be an encroachment upon the autonomy of local
governments.
GOV. LUIS RAYMUND F. VILLAFUERTE, JR v. HON. JESSE M. ROBREDO

FACTS:

 Commission on Audit (COA) conducted an examination and audit on the manner the local government
units (LGUs) utilized their Internal Revenue Allotment (IRA) for the calendar years 1993-1994

o The examination yielded an official report,showing that a substantial portion of the 20%
development fund of some LGUs was not actually utilized for development projects but was
diverted to expenses properly chargeable against the Maintenance and Other Operating Expenses
(MOOE), in stark violation of LGC

 The DILG and DBM Secretaries issued memorandum circular

o Which underscored that the 20% of the IRA intended for development projects should be utilized
for social development, economic development and environmental management

 respondent, in his capacity as DILG Secretary, issued the assailed MC No. 2010-83, entitled "Full
Disclosure of Local Budget and Finances, and Bids and Public Offerings," which aims to promote good
governance through enhanced transparency and accountability of LGUs

 the respondent issued MC No. 2010-138, reiterating that 20% component of the IRA shall be utilized for
desirable social, economic and environmental outcomes essential to the attainment of the constitutional
objective of a quality of life for all

 The petitioners argue that the assailed issuances of the respondent interfere with the local and fiscal
autonomy of LGUs embodied in the Constitution and the LGC

o They argue that the respondent cannot substitute his own discretion with that of the local
legislative council in enacting its annual budget and specifying the development projects that the
20% component of its IRA should fund

ISSUE:

Whether or not the assailed memorandum circulars violate the principles of local and fiscal autonomy enshrined in
the Constitution and the LGC.

RULING:

The assailed memorandum circulars do not transgress (break the rule) the local and fiscal autonomy granted to
LGUs.

 The Constitution has expressly adopted the policy of ensuring the autonomy of LGUs. To highlight its
significance, the entire Article X of the Constitution was devoted to laying down the bedrock upon which
this policy is anchored.

 local autonomy means a more responsive and accountable local government structure instituted through a
system of decentralization.

 Autonomy is either decentralization of administration ordecentralization of power.

 The President exercises ‘general supervision’ over them, but only to ‘ensure that local affairs are
administered according to law.’ He has no control over their acts in the sense that he can substitute their
judgments with his own."

 The President’s power of general supervision means the power of a superior officer to see to it that
subordinates perform their functions according to law.

o This is distinguished from the President’s power of control which is the power to alter or modify
or set aside what a subordinate officer had done in the performance of his duties and to substitute
the judgment of the President over that of the subordinate officer.

 Under the LGC, the 20% portion of the IRA shall be allocated for the development projects

o That the term development was characterized as the "realization of desirable social, economic and
environmental outcome" does not operate as a restriction of the term so as to exclude some other
activities that may bring about the same result.

 Significantly, the issuance itself did not provide for sanctions. It did not particularly establish a new set of
facts or omissions which are deemed violations and provide the corresponding penalties therefor. It simply
stated a reminder to LGUs that there are existing rules to consider in the disbursement of the 20%
development fund and that non-compliance therewith may render them liable to sanctions which are
provided in the LGC and other applicable laws.

 Autonomy, however, is not meant to end the relation of partnership and interdependence between the
central administration and local government units, or otherwise, to usher in a regime of federalism. The
Charter has not taken such a radical step.

o Local governments, under the Constitution, are subject to regulation, however limited, and for no
other purpose than precisely, albeit paradoxically, to enhance self-government

 A scrutiny of the contents of the mentioned issuances shows that they do not, in any manner, violate the
fiscal autonomy of LGUs. To be clear, "fiscal autonomy means that local governments have the power to
create their own sources of revenue in addition to their equitable share in the national taxes released by the
national government, as well as the power to allocate their resources in accordance withtheir own
priorities.It extends to the preparation of their budgets, and local officials in turn have to work within the
constraints thereof."

 the assailed issuances were issued pursuant to the policy of promoting good governance through
transparency, accountability and participation. The action of the respondent is certainly within the
constitutional bounds of his power as alter ego of the President.
THE VETERANS FEDERATION OF THE PHILIPPINES v. Hon. ANGELO T. REYES

FACTS:

 Veterans Federation of the Philippines, a corporate body organized under Republic Act No. 2640 and duly
registered with the Securities and Exchange Commission.

 DND Secretary issued the assailed DND Department Circular No. 04 entitled, "Further Implementing
the Provisions of Sections 1 and 2 of Republic Act No. 2640,"

 Veteran – any person who rendered military service in the land, sea or air forces of the Philippines during
the revolution against Spain, the Philippine American War, World War II, including Filipino citizens who
served in Allied Forces in the Philippine territory and foreign nationals who served in Philippine forces

 Petitioner mainly alleges that the rules and guidelines laid down in the assailed Department Circular No. 04
expanded the scope of "control and supervision" beyond what has been laid down in Rep. Act No. 2640.

 Petitioner claims that it is not a public nor a governmental entity but a private organization, and advances
this claim to prove that the issuance of DND Department Circular No. 04 is an invalid exercise of
respondent Secretary’s control and supervision

 Petitioner claims that the VFP does not possess the elements which would qualify it as a public office,
particularly the possession/delegation of a portion of sovereign power of government to be exercised for the
benefit of the public;

ISSUE:

IS THE VFP A PRIVATE CORPORATION?

RULING:

 Yes

 power of control as "the power of an officer to alter or modify or nullify or set aside what a subordinate
has done in the performance of his duties and to substitute the judgment of the former to that of the latter."

o The power of supervision, means "overseeing, or the power or authority of an officer to see that
subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former may
take such action or step as prescribed by law to make them perform their duties."

 In the same case, we went on to adopt Mechem’s view that the delegation to the individual of some of the
sovereign functions of government is "the most important characteristic" in determining whether a position
is a public office or not.

 The most important characteristic which distinguishes an office from an employment or contract is that the
creation and conferring of an office involves a delegation to the individual of some of the sovereign
functions of government, to be exercised by him for the benefit of the public; – that some portion of the
sovereignty of the country, either legislative, executive or judicial, attaches, for the time being, to be
exercised for the public benefit.
 In the case at bar, the functions of petitioner corporation enshrined in Section 4 of Rep. Act No. 2640
should most certainly fall within the category of sovereign functions. The protection of the interests of war
veterans is not only meant to promote social justice, but is also intended to reward patriotism. All of the
functions in Section 4 concern the well-being of war veterans, our countrymen who risked their lives and
lost their limbs in fighting for and defending our nation. It would be injustice of catastrophic proportions to
say that it is beyond sovereignty’s power to reward the people who defended her.

 Petitioner claims that its funds are not public funds because no budgetary appropriations or government
funds have been released to the VFP directly or indirectly from the DBM, and because VFP funds come
from membership dues and lease rentals earned from administering government lands reserved for the VFP.

o Court: funds in the hands of the VFP from whatever source are public funds, and can be used only
for public purposes.

o It is important to note here that the membership dues collected from the individual members of
VFP’s affiliate organizations do not become public funds while they are still funds of the affiliate
organizations.

o No less public is the use for the VFP funds, as such use is limited to the purposes of the VFP
which we have ruled to be sovereign functions.

 Petitioner’s stand that the VFP is a private corporation because membership thereto is voluntary is likewise
erroneous.

o As stated above, the membership of the VFP is not the individual membership of the affiliate
organizations, but merely the aggregation of the heads of such affiliate organizations.

 PLDT case: Respondents claim that the supposed declaration of the DBM that petitioner is a non-
government organization is not persuasive, since DBM is not a quasi-judicial agency.

o The DBM is indeed an expert on determining what the various government agencies and
corporations are.
SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, vs.
HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION ADMINISTRATION

FACTS:

 a pickup owned and operated by respondent National Irrigation Administration, a government agency
bearing Plate No. IN-651, then driven officially by Hugo Garcia, an employee of said agency as its regular
driver, bumped a bicycle ridden by Francisco Fontanilla, son of herein petitioners, and Restituto Deligo, at
Maasin, San Jose City along the Maharlika Highway. As a result of the impact, Francisco Fontanilla and
Restituto Deligo were injured and brought to the San Jose City Emergency Hospital for treatment.
Fontanilla was later transferred to the Cabanatuan Provincial Hospital where he died.

 Respondent National Irrigation Administration, however, avers that it cannot be held liable for the damages
because it is an agency of the State performing governmental functions and driver Hugo Garcia was a
regular driver of the vehicle, not a special agent who was performing a job or act foreign to his usual duties.

ISSUE:

Whether or not the award of moral damages, exemplary damages and attorney's fees is legally proper in a complaint
for damages based on quasi-delict which resulted in the death of the son of herein petitioners.

RULING:

 The liability of the State has two aspects. namely:

1. Its public or governmental aspects where it is liable for the tortious acts of special agents only.

2. Its private or business aspects (as when it engages in private enterprises) where it becomes liable as an
ordinary employer.

 Certain functions and activities, which can be performed only by the government, are more or less
generally agreed to be "governmental" in character, and so the State is immune from tort liability. On the
other hand, a service which might as well be provided by a private corporation, and particularly when it
collects revenues from it, the function is considered a "proprietary" one, as to which there may be liability
for the torts of agents within the scope of their employment.

 The National Irrigation Administration is an agency of the government exercising proprietary functions

 NIA is a government corporation with juridical personality and not a mere agency of the
government. Since it is a corporate body performing non-governmental functions, it now becomes
liable for the damage caused by the accident resulting from the tortious act of its driver-employee. In
this particular case, the NIA assumes the responsibility of an ordinary employer and as such, it
becomes answerable for damages.

 respondent NIA is hereby directed to pay herein petitioners-spouses

BOY SCOUTS OF THE PHILIPPINES, vs. COMMISSION ON AUDIT

FACTS:

 COA Resolution stated that the BSP was created as a public corporation under Commonwealth Act No.
111, as amended by Presidential Decree No. 460 and Republic Act No. 7278

 The BSP believes that the cited case has been superseded by RA 7278. Thereby weakening the case’s
conclusion that the BSP is a government-controlled corporation

 Also the BSP respectfully believes that the BSP is not "appropriately regarded as a government
instrumentality under the 1987 Administrative Code" as stated in the COA resolution.

 It may be argued also that the BSP is not an "agency" of the Government. The 1987 Administrative Code,
merely referred the BSP as an "attached agency" of the DECS as distinguished from an actual line agency
of departments that are included in the National Budget. The BSP believes that an "attached agency" is
different from an "agency." Agency, as defined in Section 2(4) of the Administrative Code, is defined as
any of the various units of the Government including a department, bureau, office, instrumentality,
government-owned or controlled corporation or local government or distinct unit therein.

 While the BSP concedes that its functions do relate to those that the government might otherwise
completely assume on its own, it avers that this alone was not determinative of the COA’s audit
jurisdiction over it.

 The BSP contends that Republic Act No. 7278 introduced crucial amendments to its charter; hence, the
findings of the Court in Boy Scouts of the Philippines v. National Labor Relations Commission are no longer
valid as the government has ceased to play a controlling influence in it.

o Ruling: BSP is a public corporation

 Claiming that the amendments introduced by Republic Act No. 7278 constituted a supervening event that
changed the BSP’s corporate identity in the same way that the government’s privatization program
changed PAL’s, the BSP makes the case that the government no longer has control over it; thus, the COA
cannot use the Boy Scouts of the Philippines v. National Labor Relations Commission as its basis for the
exercise of its jurisdiction and the issuance of COA Resolution

 Petitioner:

o It is not far-fetched, in fact, to concede that BSP’s funds and assets are private in character. Unlike
ordinary public corporations, such as provinces, cities, and municipalities, or government-owned
and controlled corporations, such as Land Bank of the Philippines and the Development Bank of
the Philippines, the assets and funds of BSP are not derived from any government grant. For its
operations, BSP is not dependent in any way on any government appropriation; as a matter of
fact, it has not even been included in any appropriations for the government.

 COA argues that the BSP is a public corporation created under Commonwealth Act No. 111 and whose
functions relate to the fostering of public virtues of citizenship and patriotism and the general
improvement of the moral spirit and fiber of the youth.
  Petitioner: BSP’s assets and funds were never acquired from the government. Its operations are not in any
way financed by the government, as BSP has never been included in any appropriations act for the
government. Neither has the government invested funds with BSP. BSP, has not been, at any time, a user
of government property or funds; nor have properties of the government been held in trust by BSP.

o BSP contends that it is not a government-owned or controlled corporation; neither is it an

instrumentality, agency, or subdivision of the government.

 The COA concludes that being a government agency, the funds and property owned or held by the BSP are
subject to the audit authority of the COA pursuant to Section 2(1), Article IX (D) of the 1987 Constitution.

ISSUE:

whether the BSP falls under the COA’s audit jurisdiction.

RULING:

 The true criterion, therefore, to determine whether a corporation is public or private is found in the
totality of the relation of the corporation to the State. If the corporation is created by the State as the
latter’s own agency or instrumentality to help it in carrying out its governmental functions, then that
corporation is considered public; otherwise, it is private

 BSP is a public corporation and its funds are subject to the COA’s audit jurisdiction.

 Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose created by law; their
personality begins as soon as they have been constituted according to law;

(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a
juridical personality, separate and distinct from that of each shareholder, partner or member.

o Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit of a
constitutional mandate, comes within the class of "public corporations" defined by paragraph 2,
Article 44 of the Civil Code and governed by the law which creates it, pursuant to Article 45 of the
same Code.

 As an attached agency, the BSP enjoys operational autonomy, as long as policy and program coordination is
achieved by having at least one representative of government in its governing board, which in the case of
the BSP is the DECS Secretary. In this sense, the BSP is not under government control or "supervision and
control." Still this characteristic does not make the attached chartered agency a private corporation covered
by the constitutional proscription in question.

 The BSP is a public corporation or a government agency or instrumentality with juridical personality,
which does not fall within the constitutional prohibition in Article XII, Section 16, notwithstanding the
amendments to its charter. Not all corporations, which are not government owned or controlled, are ipso
facto to be considered private corporations as there exists another distinct class of corporations or chartered
institutions which are otherwise known as "public corporations."
 o These corporations are treated by law as agencies or instrumentalities of the government which are
not subject to the tests of ownership or control and economic viability but to different criteria
relating to their public purposes/interests or constitutional policies and objectives and their
administrative relationship to the government or any of its Departments or Offices.

 Justice carpio’s dissent: Note that in Boy Scouts of the Philippines v. National Labor Relations Commission,
the BSP, under its former charter, was regarded as both a government owned or controlled corporation
with original charter and a "public corporation."

 As presently constituted, the BSP still remains an instrumentality of the national government. It is a public
corporation created by law for a public purpose, attached to the DECS pursuant to its Charter and the
Administrative Code of 1987. It is not a private corporation which is required to be owned or controlled by
the government and be economically viable to justify its existence under a special law.

 There are two types of government corporations – those that are involved in performing

o governmental functions, like garbage disposal, Manila waterworks, and so on; and

o those government corporations that are involved in business functions.

 this Court cannot agree with the dissenting opinion which equates the changes introduced by Republic Act
No. 7278 to the BSP Charter as clear manifestation of the intent of Congress "to return the BSP to the
private sector." It was not the intent of Congress in enacting Republic Act No. 7278 to give up all interests
in this basic youth organization, which has been its partner in forming responsible citizens for decades.
PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS v. COMMISSION ON
AUDIT

FACTS:

 The petitioner was incorporated as a juridical entity by virtue of Act No. 1285, by the Philippine
Commission. The petitioner, at the time it was created, was composed of animal aficionados and animal
propagandists.

 during the first regular session of the National Assembly, Commonwealth Act Numbered One Hundred
Forty Eight was enacted depriving the agents of the Society for the Prevention of Cruelty to Animals of
their power to arrest persons who have violated the laws prohibiting cruelty to animals thereby correcting
a serious defect in one of the laws existing in our statute books.

o Whereas, the cruel treatment of animals is an offense against the State, penalized under our
statutes, which the Government is duty bound to enforce;

 an audit team from respondent Commission on Audit (COA) visited the office of the petitioner to conduct
an audit survey pursuant to COA Office Order No. 2003-051

o The petitioner demurred on the ground that it was a private entity not under the jurisdiction of
COA

 General Counsel of respondent COA, in a Memorandum dated July 13, 2004, affirmed her earlier opinion
that the petitioner was a government entity that was subject to the audit jurisdiction of respondent COA.

 Petitioner argues even though it was created by special legislation in 1905 as there was no general law then
existing under which it may be organized or incorporated, it exercises no governmental functions because
these have been revoked by C.A. No. 148 and E.O. No. 63

 The respondents contend that since the petitioner is a "body politic" created by virtue of a special
legislation and endowed with a governmental purpose, then, indubitably, the COA may audit the financial
activities of the latter.

 The petitioner avers that it does not have the authority to impose fines for violation of animal welfare laws;
it only enjoyed the privilege of sharing in the fines imposed and collected from its efforts in the
enforcement of animal welfare laws; such privilege, however, was subsequently abolished by C.A. No.
148; that it continues to exist as a private corporation since it was created by the Philippine Commission
before the effectivity of the Corporation law,

ISSUE:

whether the petitioner qualifies as a government agency that may be subject to audit by respondent COA.

RULING:

 The test to determine whether a corporation is government owned or controlled, or private in nature is
simple.

o Is it created by its own charter for the exercise of a public function, or by incorporation under the
general corporation law?
 o Those with special charters are government corporations subject to its provisions, and its
employees are under the jurisdiction of the Civil Service Commission, and are compulsory
members of the Government Service Insurance System

 And since the underpinnings of the charter test had been introduced by the 1935 Constitution and not
earlier, it follows that the test cannot apply to the petitioner, which was incorporated by virtue of Act No.
1285, enacted on January 19, 1905. Settled is the rule that laws in general have no retroactive effect, unless
the contrary is provided. All statutes are to be construed as having only a prospective operation, unless the
purpose and intention of the legislature to give them a retrospective effect is expressly declared or is
necessarily implied from the language used

 The general principle of prospectivity of the law likewise applies to Act No. 1459, otherwise known as the
Corporation Law, which had been enacted by virtue of the plenary powers of the Philippine Commission on
March 1, 1906, a little over a year after January 19, 1905, the time the petitioner emerged as a juridical
entity.

 In a legal regime where the charter test doctrine cannot be applied, the mere fact that a corporation has been
created by virtue of a special law does not necessarily qualify it as a public corporation.

 The amendments introduced by C.A. No. 148 made it clear that the petitioner was a private corporation and
not an agency of the government. This was evident in Executive Order No. 63, issued by then President of
the Philippines Manuel L. Quezon, declaring that the revocation of the powers of the petitioner to appoint
agents with powers of arrest "corrected a serious defect" in one of the laws existing in the statute books.

 As a curative statute, and based on the doctrines so far discussed, C.A. No. 148 has to be given retroactive
effect, thereby freeing all doubt as to which class of corporations the petitioner belongs, that is, it is a quasi-
public corporation, a kind of private domestic corporation, which the Court will further elaborate on under
the fourth point.

 The employees of the petitioner are registered and covered by the Social Security System at the latter’s
initiative, and not through the Government Service Insurance System, which should be the case if the
employees are considered government employees. This is another indication of petitioner’s nature as a
private entity.

 The respondents contend that the petitioner is a "body politic" because its primary purpose is to secure the
protection and welfare of animals which, in turn, redounds to the public good.

 The fact that a certain juridical entity is impressed with public interest does not, by that circumstance alone,
make the entity a public corporation, inasmuch as a corporation may be private although its charter contains
provisions of a public character, incorporated solely for the public good. This class of corporations may
be considered quasi-public corporations, which are private corporations that render public service,
supply public wants, or pursue other eleemosynary objectives.

 Examples of these corporations are utility, railroad, warehouse, telegraph, telephone, water supply
corporations and transportation companies. It must be stressed that a quasi-public corporation is a species
of private corporations, but the qualifying factor is the type of service the former renders to the public: if
it performs a public service, then it becomes a quasi-public corporation

 A bank, for example, is a private corporation; yet, it is created for a public benefit. Private schools and
universities are likewise private corporations; and yet, they are rendering public service. Private hospitals
and wards are charged with heavy social responsibilities. More so with all common carriers. On the other
hand, there may exist a public corporation even if it is endowed with gifts or donations from private
individuals.
 The true criterion, therefore, to determine whether a corporation is public or private is found in the totality
of the relation of the corporation to the State. If the corporation is created by the State as the latter’s own
agency or instrumentality to help it in carrying out its governmental functions, then that corporation is
considered public; otherwise, it is private. Applying the above test, provinces, chartered cities, and
barangays can best exemplify public corporations. They are created by the State as its own device and
agency for the accomplishment of parts of its own public works

 the petition is GRANTED. Petitioner is DECLARED a private domestic corporation subject to the
jurisdiction of the Securities and Exchange Commission. The respondents are ENJOINED from
investigating, examining and auditing the petitioner's fiscal and financial affairs.
MARILAO WATER CONSUMERS ASSOCIATION, INC v. INTERMEDIATE APPELLATE COURT,
MUNICIPALITY OF MARILAO, BULACAN, SANGGUNIANG BAYAN, MARILAO, BULACAN, and
MARILAO WATER DISTRICT

FACTS:

 Under PD 198, water districts may be created by the different local legislative bodies by the passage of a
resolution to this effect, subject to the terms of the decree. The primary function of these water districts is
to sell water to residents within their territory, under such schedules of rates and charges as may be
determined by their boards. They shall manage, administer, operate and maintain all watersheds within their
territorial boundaries, safeguard and protect the use of the waters therein, supervise and control structures
within their service areas, and prohibit any person from selling or otherwise disposing of water for public
purposes within their service areas where district facilities are available to provide such service.

 The juridical entities thus created and organized under PD 198 are considered quasi-public corporations,
performing public services and supplying public wants. They are authorized not only to "exercise all the
powers which are expressly granted" by said decree, and those "which are necessarily implied from or
incidental to" said powers, but also "the power of eminent domain, the exercise .. (of which) shall however
be subject to review by the Administration" (LWUA). In addition to the powers granted in, and subject to
such restrictions imposed under, the Act, they may also exercise the powers, rights and privileges given to
private corporations under existing laws.

ISSUE:

RULING:

 The juridical entities known as water districts created by PD 198, although considered as quasi-public
corporations and authorized to exercise the powers, rights and privileges given to private corporations
under existing laws are entirely distinct from corporations organized under the Corporation Code, PD 902-
A, as amended.