Set 01

I. General Principles (Cases)

1.) Liban v. Gordon (G.R. No. 175352, 18 January 2011, 654 PHIL 680-738)

Doctrine: The PNRC, as a National Society of the International Red Cross and Red Crescent
Movement, can neither "be classified as an instrumentality of the State, so as not to lose its
character of neutrality" as well as its independence, nor strictly as a private corporation since
it is regulated by international humanitarian law and is treated as an auxiliary of the State.

Facts: Respondent Richard J. Gordon filed a motion for reconsideration of the Decision
promulgated by the Supreme Court which held that respondent did not forfeit his seat in the
Senate when he accepted the chairmanship of the PNRC Board of Governors, as "the office
of the PNRC Chairman is not a government office or an office in a government-owned or
controlled corporation for purposes of the prohibition in Section 13, Article VI of the 1987
Constitution."

The Decision, however, further declared void the PNRC Charter "insofar as it creates the
PNRC as a private corporation" and consequently ruled that "the PNRC should incorporate
under the Corporation Code and register with the Securities and Exchange Commission if it
wants to be a private corporation.

Issue: Whether the PNRC is a private corporation

Ruling: No.

The passage of several laws relating to the PNRC’s corporate existence notwithstanding the
effectivity of the constitutional proscription on the creation of private corporations by law, is a
recognition that the PNRC is not strictly in the nature of a private corporation contemplated by
the aforesaid constitutional ban.

National Societies such as the PNRC act as auxiliaries to the public authorities of their own
countries in the humanitarian field and provide a range of services including disaster relief and
health and social programmes.

A National Society partakes of a sui generis character. It is a protected component of the Red
Cross movement under Articles 24 and 26 of the First Geneva Convention, especially in times
of armed conflict. These provisions require that the staff of a National Society shall be
respected and protected in all circumstances. Such protection is not ordinarily afforded by an
international treaty to ordinary private entities or even non-governmental organisations
(NGOs). National societies are therefore organizations that are directly regulated by
international humanitarian law, in contrast to other ordinary private entities, including NGOs.
The auxiliary status of a Red Cross Society means that it is at one and the same time a
private institution and a public service organization because the very nature of its work implies
cooperation with the authorities, a link with the State.
It is in recognition of this sui generis character of the PNRC that R.A. No. 95 has remained
valid and effective from the time of its enactment in March 22, 1947 under the 1935
Constitution and during the effectivity of the 1973 Constitution and the 1987 Constitution.

Furthermore, the purpose of the constitutional provision prohibiting Congress from creating
private corporations was to prevent the granting of special privileges to certain individuals,
families, or groups, which were denied to other groups. Based on the above discussion, it can
be seen that the PNRC Charter does not come within the spirit of this constitutional provision,
as it does not grant special privileges to a particular individual, family, or group, but creates an
entity that strives to serve the common good.

Thus, by requiring the PNRC to organize under the Corporation Code just like any other
private corporation, the Decision of July 15, 2009 lost sight of the PNRC’s special status under
international humanitarian law and as an auxiliary of the State, designated to assist it in
discharging its obligations under the Geneva Conventions.

To be recognized in the International Committee, the PNRC must have an autonomous status,
and carry out its humanitarian mission in a neutral and impartial manner. It is the main
characteristic of National Societies that they "are not inspired by the desire for financial gain
but by individual commitment and devotion to a humanitarian purpose freely chosen or
accepted as part of the service that National Societies through its volunteers and/or members
render to the Community.

The PNRC, as a National Society of the International Red Cross and Red Crescent
Movement, can neither "be classified as an instrumentality of the State, so as not to lose its
character of neutrality" as well as its independence, nor strictly as a private corporation since
it is regulated by international humanitarian law and is treated as an auxiliary of the State.

2.) Boy Scouts of the Phil. v. COA (G.R. No. 177131, June 7, 2011, 666 PHIL 140-224)

Doctrine:Since the BSP, under its amended charter, continues to be a public corporation or a
government instrumentality, it is subject to the exercise by the COA of its audit jurisdiction in
the manner consistent with the provisions of the BSP Charter.

Facts: COA issued a Resolution to classify Boy Scouts of the Philippines (BSP) as among
the government corporations subject to COA’s annual financial audit. The BSP, through its
President Jejomar Binay, sought reconsideration of the COA Resolution, claiming that RA
7278 eliminated the “substantial government participation” in the National Executive Board by
removing: (i) the President of the Philippines and executive secretaries, with the exception of
the Secretary of Education, as members thereof; and (ii) the appointment and confirmation
power of the President of the Philippines, as Chief Scout, over the members of the said
Board.
The BSP further claimed that the 1987 Administrative Code itself defines government-owned
and controlled corporations as agencies organized as stock or non-stock corporations which
the BSP, under its present charter, is not.

Finally, they claimed that the Government, like in other GOCCs, does not have funds invested
in the BSP. The BSP is not an entity administering special funds. The BSP is neither a unit of
the Government; a department that refers to an executive department as created by law; nor a
bureau that refers to any principal subdivision or unit of any department.

Issue: WON the Boy Scouts of the Philippines is a government-owned and controlled
corporation, and thus, subject to COA’s audit jurisdiction.

Ruling:Yes. After considering the legislative history of the amended charter and the
applicable laws and the arguments of both parties, the Court found that the BSP is a public
corporation and its funds are subject to the COA’s audit jurisdiction.

The BSP Charter created the BSP as a “public corporation” to serve the following public
interest or purpose: xxx to promote through organization and cooperation with other agencies,
the ability of boys to do useful things for themselves and others, to train them in scout craft,
and to inculcate in them patriotism, civic consciousness and responsibility, courage,
self-reliance, discipline and kindred virtues, and moral values, using the method which are in
common use by boy scouts.

The purpose of the BSP as stated in its amended charter shows that it was created in order to
implement a State policy declared in Article II, Section 13 of the Constitution. 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.

The Constitution emphatically prohibits the creation of private corporations except by a

general law applicable to all citizens. The purpose of this constitutional provision is to ban
private corporations created by special charters, which historically gave certain individuals,
families or groups special privileges denied to other citizens.

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 exist
another distinct class of corporations or chartered institutions which are otherwise known as
“public corporations.” These corporations are treated by law as agencies or instrumentalities
of the government which are not subject to the test 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.

Since BSP, under its amended charter, continues to be a public corporation or a government
instrumentality, the Court concludes that it is subject to the exercise by the COA of its audit
jurisdiction in the manner consistent with the provisions of the BSP Charter.

Notes:
There are 2 types of government corporations:
1) Performing governmental functions (like garbage disposal, waterworks, etc.)
2) Performing business functions
Two criteria:
1) For gov’t corp to prove that they can be efficient in the areas of their proper functions.
2) They should not go into activities that the private sector can do better.

Art. 44 Civil Code. 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 juridical personality, separate and distinct from that of each
shareholder, partner or member.

3.) Philippine Society for the Prevention of Cruelty to Animals v. Commission on Audit,
et al. (G.R. No. 169752, 25 September 2007)

DOCTRINE:
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.

FACTS:
The petitioner was incorporated as a juridical entity over one hundred years ago by virtue of Act No.
1285, enacted on January 19, 1905, by the Philippine Commission. The petitioner was composed of
animal aficionados and animal propagandists. The objects of the petitioner, as stated in Section 2 of its
charter, shall be to enforce laws relating to cruelty inflicted upon animals or the protection of animals in
the Philippine Islands, and generally, to do and perform all things which may tend in any way to
alleviate the suffering of animals and promote their welfare.

At the time of the enactment of Act No. 1285, the original Corporation Law, Act No. 1459, was not yet in
existence. Act No. 1285 antedated both the Corporation Law and the constitution of the SEC.

For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for the
protection of animals, the petitioner was initially imbued under its charter with the power to apprehend
violators of animal welfare laws. In addition, the petitioner was to share 1/2 of the fines imposed and
collected through its efforts for violations of the laws related thereto.

Subsequently, however, the power to make arrests as well as the privilege to retain a portion of the
fines collected for violation of animal-related laws were recalled by virtue of C.A. No. 148. Whereas, the
cruel treatment of animals is now an offense against the State, penalized under our statutes, which the
Government is duty bound to enforce;

When the COA was to perform an audit on them they refuse to do so, by the reason that they are a
private entity and not under the said commission. It argued that COA covers only government entities.
On the other hand the COA decided that it is a government entity.

ISSUE:

Whether PSPCA is a private corporation?

RULING:
YES.

First, the Court agrees with the petitioner that the “charter test” cannot be applied.
Essentially, the “charter test” provides that the test to determine whether a corporation is
government owned or controlled, or private in nature is simple. Is it created by its own charter
for the exercise of a public function, or by incorporation under the general corporation law?
Those with special charters are government corporations subject to its provisions, and its
employees are under the jurisdiction of the CSC, and are compulsory members of the GSIS.

And since 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.
In case of doubt, the doubt must be resolved against the retrospective effect.

Second, a reading of petitioner’s charter shows that it is not subject to control or supervision
by any agency of the State, unlike GOCCs. No government representative sits on the board
of trustees of the petitioner. Like all private corporations, the successors of its members are
determined voluntarily and solely by the petitioner in accordance with its by-laws, and may
exercise those powers generally accorded to private corporations, such as the powers to hold
property, to sue and be sued, to use a common seal, and so forth. It may adopt by-laws for its
internal operations: the petitioner shall be managed or operated by its officers “in accordance
with its by-laws in force.”

Third. The employees of the petitioner are registered and covered by the SSS at the latter’s
initiative, and not through the GSIS, which should be the case if the employees are
considered government employees. This is another indication of petitioner’s nature as a
private entity.

Fourth. 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. This argument, is not tenable. 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. While purposely
organized for the gain or benefit of its members, they are required by law to discharge
functions for the public benefit. 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.

Authorities are of the view that the purpose alone of the corporation cannot be taken as a safe
guide, for the fact is that almost all corporations are nowadays created to promote the interest,
good, or convenience of the public. 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.

Fifth. The respondents argue that since the charter of the petitioner requires the latter to
render periodic reports to the Civil Governor, whose functions have been inherited by the
President, the petitioner is, therefore, a government instrumentality.

4.) The Province of North Cotabato v. the Gov. of the Republic of the Phils. Peace Panel
(G.R. No. 183591, 14 October 2008)

Doctrine:

No province, city, or municipality, not even the ARMM, is recognized under our laws as having
an "associative" relationship with the national government. Indeed, the concept implies
powers that go beyond anything ever granted by the Constitution to any local or regional
government. It also implies the recognition of the associated entity as a state. The
Constitution, however, does not contemplate any state in this jurisdiction other than the
Philippine State, much less does it provide for a transitory status that aims to prepare any part
of Philippine territory for independence.

Even the mere concept animating many of the MOA-AD's provisions, therefore, already
requires for its validity the amendment of constitutional provisions, specifically the following
provisions of Article X:

SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the
provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim
Mindanao and the Cordilleras as hereinafter provided.

SECTION 15. 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.

Facts:

In pursuit of peace in Mindanao, the Philippine Government and MILF agreed to undergo
peace talks. The fruit of the talks is the Memorandum of Agreement on the Ancestral Domain
(MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001. The parties were
about to sign the agreement, through the Chairpersons of their respective peace negotiating
panels, in Kuala Lumpur, Malaysia, but petitioners filed for Mandamus and Prohibition with
Prayer for the Issuance of Writ of Preliminary Injunction and Temporary Restraining Order.
The Court issued the TRO.

The MOA-AD essentially would create a Bangsamoro Juridical Entity (BJE), which would
result in an associative relationship (a state within a state). The contents of the agreement in
question are as follows:

· Inclusion of the ARMM provinces and other areas in Mindanao in the BJE

· The authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the
Bangsamoro

· Jurisdiction over all natural resources within its “internal waters”

· Sharing of minerals on the territorial waters between the Central Government and the BJE,
in favor of the latter, through production sharing and economic cooperation agreement.

· The MOA-AD states that the BJE is free to enter into any economic cooperation and trade
relations with foreign countries and shall have the option to establish trade missions in those
countries.

· The external defense of the BJE is to remain the duty and obligation of the Central
Government.

· The sharing between the Central Government and the BJE of total production pertaining to
natural resources is to be 75:25 in favor of the BJE.

· The BJE may modify or cancel the forest concessions, timber licenses, contracts or
agreements, mining concessions, Mineral Production and Sharing Agreements (MPSA),
Industrial Forest Management Agreements (IFMA), and other land tenure instruments granted
by the Philippine Government, including those issued by the present ARMM.

· The MOA-AD describes the relationship of the Central Government and the BJE as
“associative”, characterized by shared authority and responsibility.

· The MOA-AD provides that its provisions requiring “amendments to the existing legal
framework” (pertaining to the Constitution and related substantive laws) shall take effect upon
signing of the Comprehensive Compact and upon effecting the aforesaid amendments, with
due regard to the non-derogation of prior agreements and within the stipulated timeframe to
be contained in the Comprehensive Compact.

Issue:

1. Whether, the provisions of MOA-AD establishes an associative relationship with the

Philippine Government and the BJE resulting to the latter as a separate independent state or
a juridical, territorial, political subdivision not recognized by law
2. Whether the MOA-AD is inconsistent with the Philippine Constitution and laws

3. Whether the MOA-AD is inconsistent with the International laws

Ruling:

1. Yes, the provisions of MOA-AD establishes an associative relationship with the Philippine
Government and the BJE resulting to the latter as a separate independent state or a juridical,
territorial, political subdivision not recognized by law.

The court used the definition of Keitner and Reisman that an association is formed when two
states of unequal power voluntarily establish durable links. In the basic model, one state, the
associate, delegates certain responsibilities to the other, the principal, while maintaining its
international status as a state. Free associations represent a middle ground between
integration and independence. Also it bears noting that in international practice, free
association is understood as an international association between sovereigns. In international
practice, the "associated state" arrangement has usually been used as a transitional device of
former colonies on their way to full independence. In the Philippines, the concept of
association is not recognized under the present Constitution

In this case, paragraph 4 under Governance in the MOA-AD provides that The relationship
between the Central Government and the Bangsamoro juridical entity shall be associative
characterized by shared authority and responsibility with a structure of governance based on
executive, legislative, judicial and administrative institutions with defined powers and functions
in the comprehensive compact. A period of transition shall be established in a comprehensive
peace compact specifying the relationship between the Central Government and the BJE. The
provisions of the MOA which is consistent with the international concept of association
indicate, among other things, that the Parties aimed to vest in the BJE the status of an
associated state or, at any rate, a status closely approximating it. It also implies the
recognition of the associated entity as a state. The Constitution, however, does not
contemplate any state in this jurisdiction other than the Philippine State, much less does it
provide for a transitory status that aims to prepare any part of Philippine territory for
independence. BJE is a state in all but name as it meets the criteria of a state laid down in the
Montevideo Convention, namely, a permanent population, a defined territory, a government,
and a capacity to enter into relations with other states. As such, while there may be a
semblance of unity because of the associative ties between the BJE and the national
government, the act of placing a portion of Philippine territory in a status which, in
international practice, has generally been a preparation for independence, is certainly not
conducive to national unity. The provisions in the MOA-AD indicates enough of BJE’s aim of
being a separate state from the Philippines.

Hence, the provisions of MOA-AD establishes an associative relationship with the Philippine
Government and the BJE resulting to the latter as a separate independent state or a juridical,
territorial, political subdivision not recognized by law.

2. Yes, the MOA-AD is inconsistent with the Philippine Constitution and laws.
· Article X, Section 18 of the Constitution provides that "[t]he creation of the autonomous
region shall be effective when approved by a majority of the votes cast by the constituent units
in a plebiscite called for the purpose, provided that only provinces, cities, and geographic
areas voting favorably in such plebiscite shall be included in the autonomous region."

In this case, paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the present
geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which
voted for inclusion in the ARMM during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar,
Tagoloan and Tangkal - are automatically part of the BJE without need of another plebiscite, in
contrast to the areas under Categories A and B mentioned earlier in the overview. That the
present components of the ARMM and the above-mentioned municipalities voted for inclusion
therein in 2001, however, does not render another plebiscite unnecessary under the
Constitution, precisely because what these areas voted for then was their inclusion in the
ARMM, not the BJE.

· Art. X, SECTION 20 of the constitution provides that within its territorial jurisdiction and
subject to the provisions of this Constitution and national laws, the organic act of autonomous
regions shall provide for legislative powers over:

(1) Administrative organization;

(2) Creation of sources of revenues;

(3) Ancestral domain and natural resources;

(4) Personal, family, and property relations;

(5) Regional urban and rural planning development;

(6) Economic, social, and tourism development;

(7) Educational policies;

(8) Preservation and development of the cultural heritage; and

(9) Such other matters as may be authorized by law for the promotion of the general welfare
of the people of the region.

In this case, on the premise that the BJE may be regarded as an autonomous region, the
MOA-AD would require an amendment that would expand the above-quoted provision. The
mere passage of new legislation pursuant to sub-paragraph No. 9 of said constitutional
provision would not suffice, since any new law that might vest in the BJE the powers found in
the MOA-AD must, itself, comply with other provisions of the Constitution. It would not do, for
instance, to merely pass legislation vesting the BJE with treaty-making power in order to
accommodate paragraph 4 of the strand on RESOURCES which states: "The BJE is free to
enter into any economic cooperation and trade relations with foreign countries: provided,
however, that such relationships and understandings do not include aggression against the
Government of the Republic of the Philippines." Under our constitutional system, it is only the
President who has that power.

· Article II, Section 22 of the Constitution provides "The State recognizes and promotes
the rights of indigenous cultural communities within the framework of national unity and
development."

In this case, an associative arrangement does not uphold national unity. While there may be a
semblance of unity because of the associative ties between the BJE and the national
government, the act of placing a portion of Philippine territory in a status which, in
international practice, has generally been a preparation for independence, is certainly not
conducive to national unity.

· Article X, Section 3 of RA 9054 provides that "As used in this Organic Act, the phrase
"indigenous cultural community" refers to Filipino citizens residing in the autonomous region
who are:

(a) Tribal peoples. These are citizens whose social, cultural and economic conditions
distinguish them from other sectors of the national community; and

(b) Bangsa Moro people. These are citizens who are believers in Islam and who have retained
some or all of their own social, economic, cultural, and political institutions."

In this case, MOA-AD, paragraph 1 on Concepts and Principles state that: It is the birthright of
all Moros and all Indigenous peoples of Mindanao to identify themselves and be accepted as
"Bangsamoros". The Bangsamoro people refers to those who are natives or original
inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago
at the time of conquest or colonization of its descendants whether mixed or of full blood.
Spouses and their descendants are classified as Bangsamoro. The freedom of choice of the
Indigenous people shall be respected. This use of the term Bangsamoro sharply contrasts
with that found in the Article X, Section 3 of the Organic Act, which, rather than lumping
together the identities of the Bangsamoro and other indigenous peoples living in Mindanao,
clearly distinguishes between Bangsamoro people and Tribal peoples.

· Chapter VIII of the IPRA lays down a detailed procedure for the delineation and
recognition of ancestral domains.

In this case, The MOA-AD's manner of delineating the ancestral domain of the Bangsamoro
people is a clear departure from that procedure. By paragraph 1 of Territory, the Parties simply
agree that, subject to the delimitations in the agreed Schedules, "the Bangsamoro homeland
and historic territory refer to the land mass as well as the maritime, terrestrial, fluvial and
alluvial domains, and the aerial domain, the atmospheric space above it, embracing the
Mindanao-Sulu-Palawan geographic region."

Hence, the MOA-AD is inconsistent with the Philippine Constitution and laws.

3. Yes, the MOA-AD is inconsistent with the International laws.

Article 1 of both covenants, International Covenant on Civil and Political Rights and the
International Covenant on Economic, Social and Cultural Rights state, that all peoples, by
virtue of the right of self-determination, "freely determine their political status and freely pursue
their economic, social, and cultural development." The people's right to self-determination
should not, however, be understood as extending to a unilateral right of secession.

In the REPORT OF THE INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL

ASPECTS OF THE AALAND ISLANDS QUESTION, the Committee stated the rule as follows:

In the absence of express provisions in international treaties, the right of disposing of national
territory is essentially an attribute of the sovereignty of every State. Positive International Law
does not recognize the right of national groups, as such, to separate themselves from the
State of which they form part by the simple expression of a wish, any more than it recognizes
the right of other States to claim such a separation. Generally speaking, the grant or refusal of
the right to a portion of its population of determining its own political fate by plebiscite or by
some other method, is, exclusively, an attribute of the sovereignty of every State which is
definitively constituted. A dispute between two States concerning such a question, under
normal conditions therefore, bears upon a question which International Law leaves entirely to
the domestic jurisdiction of one of the States concerned.

In the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not
obligate States to grant indigenous peoples the near-independent status of an associated
state. All the rights recognized in that document are qualified in Article 46 as follows:

Nothing in this Declaration may be interpreted as implying for any State, people, group or
person any right to engage in any activity or to perform any act contrary to the Charter of the
United Nations or construed as authorizing or encouraging any action which would dismember
or impair, totally or in part, the territorial integrity or political unity of sovereign and
independent States.

In this case, the MOA-AD have provisions that would make the BJE a separate independent
state from the Philippines. As mentioned before, the act of placing a portion of Philippine
territory in a status which, in international practice, has generally been a preparation for
independence, is certainly not conducive to national unity. Such provisions are not consistent
to the Philippine Constitution and also to international laws.

Hence, the MOA-AD is inconsistent with the International laws.

SUMMARY

The petitions are ripe for adjudication. The failure of respondents to consult the local
government units or communities affected constitutes a departure by respondents from their
mandate under E.O. No. 3. Moreover, respondents exceeded their authority by the mere act
of guaranteeing amendments to the Constitution. Any alleged violation of the Constitution by
any branch of government is a proper matter for judicial review.

As the petitions involve constitutional issues which are of paramount public interest or of
transcendental importance, the Court grants the petitioners, petitioners-in-intervention and
intervening respondents the requisite locus standi in keeping with the liberal stance adopted in
David v. Macapagal-Arroyo.

Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the
present petitions provide an exception to the "moot and academic" principle in view of (a) the
grave violation of the Constitution involved; (b) the exceptional character of the situation and
paramount public interest; (c) the need to formulate controlling principles to guide the bench,
the bar, and the public; and (d) the fact that the case is capable of repetition yet evading
review.

The MOA-AD is a significant part of a series of agreements necessary to carry out the
GRP-MILF Tripoli Agreement on Peace signed by the government and the MILF back in June
2001. Hence, the present MOA-AD can be renegotiated or another one drawn up that could
contain similar or significantly dissimilar provisions compared to the original.

The Court, however, finds that the prayers for mandamus have been rendered moot in view of
the respondents' action in providing the Court and the petitioners with the official copy of the
final draft of the MOA-AD and its annexes.

The people's right to information on matters of public concern under Sec. 7, Article III of the
Constitution is in splendid symmetry with the state policy of full public disclosure of all its
transactions involving public interest under Sec. 28, Article II of the Constitution. The right to
information guarantees the right of the people to demand information, while Section 28
recognizes the duty of officialdom to give information even if nobody demands. The complete
and effective exercise of the right to information necessitates that its complementary provision
on public disclosure derive the same self-executory nature, subject only to reasonable
safeguards or limitations as may be provided by law.

The contents of the MOA-AD is a matter of paramount public concern involving public interest
in the highest order. In declaring that the right to information contemplates steps and
negotiations leading to the consummation of the contract, jurisprudence finds no distinction as
to the executory nature or commercial character of the agreement.

An essential element of these twin freedoms is to keep a continuing dialogue or process of

communication between the government and the people. Corollary to these twin rights is the
design for feedback mechanisms. The right to public consultation was envisioned to be a
species of these public rights.
At least three pertinent laws animate these constitutional imperatives and justify the exercise
of the people's right to be consulted on relevant matters relating to the peace agenda.

One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national
and local levels and for a principal forum for consensus-building. In fact, it is the duty of the
Presidential Adviser on the Peace Process to conduct regular dialogues to seek relevant
information, comments, advice, and recommendations from peace partners and concerned
sectors of society.

Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national
offices to conduct consultations before any project or program critical to the environment and
human ecology including those that may call for the eviction of a particular group of people
residing in such locality, is implemented therein. The MOA-AD is one peculiar program that
unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people,
which could pervasively and drastically result to the diaspora or displacement of a great
number of inhabitants from their total environment.

Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for
clear-cut procedure for the recognition and delineation of ancestral domain, which entails,
among other things, the observance of the free and prior informed consent of the Indigenous
Cultural Communities/Indigenous Peoples. Notably, the statute does not grant the Executive
Department or any government agency the power to delineate and recognize an ancestral
domain claim by mere agreement or compromise.

The invocation of the doctrine of executive privilege as a defense to the general right to
information or the specific right to consultation is untenable. The various explicit legal
provisions fly in the face of executive secrecy. In any event, respondents effectively waived
such defense after it unconditionally disclosed the official copies of the final draft of the
MOA-AD, for judicial compliance and public scrutiny.

In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion
when he failed to carry out the pertinent consultation process, as mandated by E.O. No. 3,
Republic Act No. 7160, and Republic Act No. 8371. The furtive process by which the MOA-AD
was designed and crafted runs contrary to and in excess of the legal authority, and amounts to
a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof. It illustrates a
gross evasion of positive duty and a virtual refusal to perform the duty enjoined.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its
specific provisions but the very concept underlying them, namely, the associative relationship
envisioned between the GRP and the BJE, are unconstitutional, for the concept presupposes
that the associated entity is a state and implies that the same is on its way to independence.

While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the
present legal framework will not be effective until that framework is amended, the same does
not cure its defect. The inclusion of provisions in the MOA-AD establishing an associative
relationship between the BJE and the Central Government is, itself, a violation of the
Memorandum of Instructions From The President dated March 1, 2001, addressed to the
government peace panel. Moreover, as the clause is worded, it virtually guarantees that the
necessary amendments to the Constitution and the laws will eventually be put in place.
Neither the GRP Peace Panel nor the President herself is authorized to make such a
guarantee. Upholding such an act would amount to authorizing a usurpation of the constituent
powers vested only in Congress, a Constitutional Convention, or the people themselves
through the process of initiative, for the only way that the Executive can ensure the outcome
of the amendment process is through an undue influence or interference with that process.

While the MOA-AD would not amount to an international agreement or unilateral declaration
binding on the Philippines under international law, respondents' act of guaranteeing
amendments is, by itself, already a constitutional violation that renders the MOA-AD fatally
defective.

WHEREFORE, respondents' motion to dismiss is DENIED. The main and intervening petitions
are GIVEN DUE COURSE and hereby GRANTED.

The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 is declared contrary to law and the Constitution.

II. Principles of Local Autonomy (Cases)

5.) Basco v. PAGCOR (G.R. No. 91649, May 14, 1991)

DOCTRINE:
Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of
government, such as the government under the Philippine Constitution, local governments
can only be an intra sovereign subdivision of one sovereign nation , it cannot be an imperium
in imperio. Local government in such a system can only mean a measure of decentralization
of the function of government.

FACTS:
PAGCOR was created and granted a franchise in January 1, 1977 to establish, operate and
maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines.
Its operation was originally conducted in the well-known floating casino "Philippine Tourist."
The operation was considered a success for it proved to be a potential source of revenue to
fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978
for PAGCOR to fully attain this objective. Subsequently, on July 11, 1983, PAGCOR was
created under P.D. 1869 to enable the Government to regulate and centralize all games of
chance authorized by existing franchise or permitted by law, under the following policy to
centralize and integrate all games of chance not heretofore authorized by existing franchises
or permitted by law in order to attain the following objectives:
a) To centralize and integrate the right and authority to operate and conduct games of chance
into one corporate entity to be controlled, administered and supervised by the Government.
b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools,(basketball, football, lotteries, etc.) and such other forms of amusement
and recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1)generate sources of additional revenue to fund
infrastructure and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs,
Population Control and such other essential public services; (2) create recreation and
integrated facilities which will expand and improve the country's existing tourist attractions;
and (3) minimize, if not totally eradicate, all the evils, malpractices and corruptions that are
normally prevalent on the conduct and operation of gambling clubs and casinos without direct
government involvement. (Section 1, P.D. 1869)

To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines.
Under its Charter's repealing clause, all laws, decrees, executive orders, rules and
regulations, inconsistent therewith, are according repealed, amended or modified.

Petitioners filed an instant petition seeking to annul the PAGCOR Charter (PD 1869) because
it is allegedly contrary to morals, public policy and order and because it constitutes a waiver
of the right of the City of Manila to impose taxes and legal fees and that the exemption clause
in P.D. 1869 is in violation of the principle of local autonomy referring to:

Section 13 par. (2) of P.D. 1869 exempts PAGCOR, as the franchise holder from paying any
"tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever
nature, whether National or Local."

ISSUE:
Whether PD 1869 violates a) the right of the City of Manila impose taxes and legal fees and
b)local autonomy clause.

RULING:
No.
a. The City of Manila, being a mere Municipal corporation has no inherent right to impose
taxes. Thus, The Charter or statute must plainly show an intent to confer that power or the
municipality cannot assume it. Its "power to tax" therefore must always yield to a legislative
act which is superior having been passed upon by the state itself which has the "inherent
power to tax.
b. The Charter of the City of Manila is subject to control by Congress. It should be
stressed that "municipal corporations are mere creatures of Congress which has the power to
"create and abolish municipal corporations" due to its "general legislative powers. Congress,
therefore, has the power of control over Local governments. And if Congress can grant the
City of Manila the power to tax certain matters, it can also provide for exemptions or even take
back the power.
c. The City of Manila's power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru the grant
of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively
on the National Government. Therefore, only the National Government has the power to issue
"licenses or permits" for the operation of gambling. Necessarily, the power to demand or
collect license fees which is a consequence of the issuance of "licenses or permits" is no
longer vested in the City of Manila.
d. Local governments have no power to tax instrumentalities of the National Government.
PAGCOR is a government owned or controlled corporation with an original charter, PD 1869.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and actually is
exempt from local taxes. Otherwise, its operation might be burdened, impeded or subjected to
control by a mere Local government. This doctrine emanates from the "supremacy" of the
National Government over local governments. Otherwise, mere creatures of the State can
defeat National policies thru extermination of what local authorities may perceive to be
undesirable activities or enterprise using the power to tax as "a tool for regulation. The power
to tax which was called by Justice Marshall as the "power to destroy cannot be allowed to
defeat an instrumentality or creation of the very entity which has the inherent power to wield it.

e. Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on
Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of revenue
and to levy taxes, fees, and other charges subject to such guidelines and limitation as the
congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees
and charges shall accrue exclusively to the local government.

The power of local government to "impose taxes and fees" is always subject to "limitations"
which Congress may provide by law. Since PD 1869 remains an "operative" law until
"amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause"
remains as an exception to the exercise of the power of local governments to impose taxes
and fees. It cannot therefore be violative but rather is consistent with the principle of local
autonomy. Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization. It does not make local governments sovereign within the state or an
imperium in imperio.

Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of
government, such as the government under the Philippine Constitution, local governments
can only be an intra sovereign subdivision of one sovereign nation , it cannot be an imperium
in imperio. Local government in such a system can only mean a measure of decentralization
of the function of government.

What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a
State concern and hence, it is the sole prerogative of the State to retain it or delegate it to
local governments.

Petition dismissed for lack of merit.

6.) Lina v. Pano (G.R. No. 129093, August 30, 2001)

Doctrine: In our system of government, the power of local government units to legislate and
enact ordinances and resolutions is merely a delegated power coming from Congress.

Municipal governments are only agents of the national government. Local councils exercise
only delegated legislative powers conferred upon them by Congress as the national
lawmaking body. The delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local government units can undo the
acts of Congress, from which they have derived their power in the first place, and negate by
mere ordinance the mandate of the statute.

Municipal corporations owe their origin to, and derive their powers and rights wholly from the
legislature. It breathes into them the breath of life, without which they cannot exist. As it
creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some
constitutional limitation on the right, the legislature might, by a single act, and if we can
suppose it capable of so great a folly and so great a wrong, sweep from existence all of the
municipal corporations in the state, and the corporation could not prevent it. We know of no
limitation on the right so far as the corporation themselves are concerned. They are, so to
phrase it, the mere tenants at will of the legislature

Facts: In December 1995, respondent Tony Calvento was appointed agent by the Philippine
Charity Sweepstakes Office (PCSO) to set up a lotto terminal in San Pedro, Laguna. He
sought a mayor's permit from Mayor Calixto Cataquiz, but the request was denied by the
latter. The denial was based on an ordinance called Kapasiyahan Blg. 508, T. 1995, passed
by the Sangguniang Panlalawigan of Laguna on September 18, 1995. This ordinance
expressed strong opposition to gambling activities, including lotto, in the province of Laguna.

In response to the denial of a mayor's permit to operate a lotto outlet in San Pedro, Laguna,
respondent Tony Calvento filed a complaint for declaratory relief, with prayer for preliminary
injunction and temporary restraining order at the RTC San Pedro Laguna, Branch 93 to
prevent the enforcement of the Kapasiyahan Blg. 508, T. 1995. He also sought an order
compelling Municipal Mayor Calixto R. Cataquiz to issue a business permit for the lotto outlet
and the annulment or invalidation of Kapasiyahan Blg. 508, T. 1995.

In February 1997, the RTC issued a decision granting respondent’s Calvento's request for a
preliminary injunction. The decision effectively enjoined the petitioners from implementing or
enforcing Kapasiyahan Blg. 508, T. 1995, which sought to prohibit the operation of lotto in the
province of Laguna.

PETITIONER’S CONTENTION
The petitioners filed a motion for reconsideration but the same was denied. This prompted the
petitioners to file a petition. The petitioners argue that the assailed resolution is a valid policy
declaration exercising the provincial government's police power under the General Welfare
Clause of Republic Act 7160, known as the Local Government Code of 1991. They also
contend that respondent Tony Calvento's lotto operation is illegal because it did not undergo
prior consultations and approval by the local government, which they claim is required by
Sections 2 (c) and 27 of R.A. 7160.

RESPONDENT’S CONTENTION
Respondent Calvento asserts that the provincial resolution essentially undermines the
authority of the national legislature since lotto had already been declared legal and permitted
nationwide. He argues that the resolution's objection to lotto is inconsistent with national laws.
Additionally, he disputes the claim that prior consultations and approval from the Sangguniang
Panlalawigan of Laguna are mandatory, contending that such requirements are merely
expressions of policy and not self-executing provisions in the Local Government Code of
1991. Calvento asserts the legality of his lotto operation, citing the authority given to him by
the Philippine Charity Sweepstakes Office (PCSO), which had itself received a franchise from
Congress to operate the lotto.

OSG’S COMMENT
The Office of the Solicitor General (OSG), argues that the Provincial Government of Laguna
lacks the power to prohibit a form of gambling that has been authorized and regulated by the
national government. The OSG maintains that local ordinances should not contravene
national statutes and underscores that municipal governments, including local councils,
exercise delegated legislative powers granted to them by Congress. The OSG emphasizes
that Congress has the prerogative to determine whether gambling, including lotto, should be
permitted, considering both national and local interests. Given that Congress has granted the
PCSO the authority to operate lotteries, the OSG asserts that the Sangguniang Panlalawigan
of Laguna cannot negate this legislative grant by preventing an activity that Congress has
already allowed.

Issues:
Whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the
denial of a mayor's permit based thereon are valid.

Ruling:
No, Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the
denial of a mayor's permit based thereon are INVALID.

The ordinance merely states the "objection" of the council to the said game. It is but a mere
policy statement on the part of the local council, which is not self-executing. Nor could it serve
as a valid ground to prohibit the operation of the lotto system in the province of Laguna.

As a policy statement expressing the local government's objection to the lotto, such resolution
is valid. This is part of the local government's autonomy to air its views which may be contrary
to that of the national government's. However, this freedom to exercise contrary views does
not mean that local governments may actually enact ordinances that go against laws duly
enacted by Congress. Given this premise, the assailed resolution in this case could not and
should not be interpreted as a measure or ordinance prohibiting the operation of lotto.

The game of lotto is a game of chance duly authorized by the national government through an
Act of Congress. Republic Act 1169, as amended by Batas Pambansa Blg. 42, is the law
which grants a franchise to the PCSO and allows it to operate the lotteries.

This statute remains valid today. While lotto is clearly a game of chance, the national
government deems it wise and proper to permit it. Hence, the Sangguniang Panlalawigan of
Laguna, a local government unit, cannot issue a resolution or an ordinance that would seek to
prohibit permits. Stated otherwise, what the national legislature expressly allows by law, such
as lotto, a provincial board may not disallow by ordinance or resolution.

In our system of government, the power of local government units to legislate and enact
ordinances and resolutions is merely a delegated power coming from Congress.

As held in Tatel vs. Virac, ordinances should not contravene an existing statute enacted by
Congress.

The reasons for this are obvious, as elucidated in Magtajas v. Pryce Properties Corp.:

Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred upon them by Congress as the
national lawmaking body. The delegate cannot be superior to the principal or exercise
powers higher than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have derived their
power in the first place, and negate by mere ordinance the mandate of the statute.
 Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot
exist. As it creates, so it may destroy. As it may destroy, it may abridge and control.
Unless there is some constitutional limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so great a folly and so great a wrong,
sweep from existence all of the municipal corporations in the state, and the corporation
could not prevent it. We know of no limitation on the right so far as the corporation
themselves are concerned. They are, so to phrase it, the mere tenants at will of the
legislature (citing Clinton vs. Ceder Rapids, etc. Railroad Co., 24 Iowa 455).

Nothing in the present constitutional provision enhancing local autonomy dictates a different
conclusion.

The basic relationship between the national legislature and the local government units has not
been enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. Without meaning to detract from that policy, we here confirm that Congress retains
control of the local government units although in significantly reduced degree now than under
our previous Constitutions. The power to create still includes the power to destroy. The power
to grant still includes the power to withhold or recall. True, there are certain notable
innovations in the Constitution, like the direct conferment on the local government units of the
power to tax (citing Art. X, Sec. 5, Constitution), which cannot now be withdrawn by mere
statute. 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.

Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy
granted to local governments will necessarily be limited and confined within the extent allowed
by the central authority. Besides, the principle of local autonomy under the 1987 Constitution
simply means "decentralization". It does not make local governments sovereign within the
state or an "imperium in imperio".

7.) Limbona v. Mangelin (G.R. No. 80391, February 28, 1989)

Doctrine: Autonomy is either decentralization of administration or decentralization of power.

There is decentralization of administration when the central government delegates
administrative powers to political subdivision 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.

Decentralization of power, on the other hand, involves an abdication of political power in favor
of local government 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.
Facts: Petitioner, Sultan Alimbusar Limbona, was elected Speaker of the Regional Legislative
Assembly or Batasang Pampook of Central Mindanao (Assembly). On October 21, 1987
Congressman Datu Guimid Matalam, Chairman of the Committee on Muslim Affairs of the
House of Representatives, invited petitioner in his capacity as Speaker of the Assembly of
Region XII in a consultation/dialogue with local government officials. Petitioner accepted the
invitation and informed the Assembly members through the Assembly Secretary that there
shall be no session in November as his presence was needed in the house committee hearing
of Congress. However, on November 2, 1987, the Assembly held a session in defiance of the
Limbona's advice, where he was unseated from his position. Petitioner prays that the
session's proceedings be declared null and void and be it declared that he was still the
Speaker of the Assembly. Pending further proceedings of the case, the SC received a
resolution from the Assembly expressly expelling petitioner's membership therefrom.
Respondents argue that petitioner had "filed a case before the Supreme Court against some
members of the Assembly on a question which should have been resolved within the confines
of the Assembly," for which the respondents now submit that the petition had become "moot
and academic" because of its resolution.

Issue:
1. WON the so-called autonomous governments of Mindanao subject to the jurisdiction of
the national courts? In other words, what is the extent of self-government given to the
two autonomous governments of Region 9 and 12? [Yes]
2. Whether petitioner’s ouster through the November 2 and 5, 1987 sessions were valid?
[No]

Ruling:

1. The autonomous governments of Mindanao were organized in Regions 9 and 12 by

Presidential Decree No. 1618. In relation to the central government, the Presidential
Decree provides that “the President shall have the power of general supervision and
control over the Autonomous Regions...” Now, autonomy is either decentralization of
administration or decentralization of power. There is 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. Decentralization of power, on the other hand, involves an abdication of political
power in the favor of local government 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 the Supreme Court, an examination of the very Presidential Decree

creating the autonomous governments of Mindanao persuades us to believe that they
were never meant to exercise autonomy through decentralization of power. The
Presidential Decree, in the first place, mandates that “the President shall have the
power of general supervision and control over Autonomous Regions.” In the second
 place, the Sangguniang Pampook, their legislative arm, is made to dischage chiefly
administrative services. Thus, the SC assumes jurisdiction.

2. Section 31 of the Region XII Sanggunian Rules, "sessions shall not be suspended or
adjourned except by direction of the Sangguniang Pampook," but it provides likewise
that "the Speaker may, on his discretion, declare a recess of "short intervals.

At the time the petitioner called the “recess,” it was not a settled matter whether or not
he could do so.The invitation tendered by the Committee on Muslim Affairs of the
House of Representatives provided a plausible reason for the intermission sought.
Assuming that a valid recess could not be called, it does not appear that the
respondents called his attention to this mistake

What appears is that instead, they opened the sessions themselves behind his back in
an apparent act of mutiny. Under the circumstances, we find equity on his side. For
this reason, we uphold the "recess" called on the ground of good faith.

The Court finds two sessions held on November to be invalid. Wherefore, the petition is
Granted. The petitioner is reinstated as Member and speaker of the Sanggunian.

8.) Disomangcop v. Datumanong (G.R. No. 149848, 25 November 2004)

Doctrine:

Facts:
1. The petitioners in this case are assailing the constitutionality and validity of DO 119 and RA
8999.
2. A history of the legal antecedents:
1. Pursuant to the Constitutional mandate to establish regional autonomy in Muslim
Mindanao and the Cordilleras, RA 6734 entitled An Act Providing for an Organic Act for
the Autonomous Region in Muslim Mindanao was enacted and signed into law on
August 1989.
2. In accordance with this, then President Corazon Aquino issued EO 426 on October
1990, which placed the control and supervision of the Department of Public Works and
Highways (“DPWH”) within the autonomous region under the Autonomous Regional
Government (“ARG”).
3. Nine years later, the DPWH secretary issued DO 119, which created a DPWH Marawi
Sub-District Engineering Office.
1. This office has jurisdiction over all national infrastructure projects and facilities
under the DPWH within Marawi City and the province of Lanao del Sur.
4. Two years later, then President Joseph Estrada signed into law RA 8999, which
established an engineering district in the province of Lanao Del Sur.
1. Significantly, it also provided that the amount necessary for the district to carry
out its functions are included in the General Appropriations Act.
5. Congress later passed RA 9054, which further strengthened and expanded the Organic
Act. This was ratified in a plebiscite. Both RA 6734 and 9054 are collectively referred to
as the ARMM Organic Acts.
3. Petitioners Arsadi Disomangcop and Ramir Dimalotang, in their capacities as Officer-in-Charge
and District Engineer, respectively, of the First Engineering District of the DPWH-ARMM in
Lanao del Sur, filed this instant petition for certiorari, prohibition and mandamus, challenging
the constitutionality of DO 119 and RA 8999.
 1. The First Engineering District of the DPWH-ARMM was created by the Autonomous
Government and had identical functions as the First Engineering District created by DO
118 and the First Engineering District of Lanao del Sur created by RA 8999.
4. The petitioners allege that:
1. DO 119 was issued with GAOD and that it violates the constitutional autonomy of the
ARMM.
1. They point out that the DO has tasked the Marawi Sub-District Engineering
Office with functions that have already been devolved to the DPWH-ARMM
First Engineering District in Lanao del Sur.
2. They also allege that RA 8999 is a piece of legislation that was not thoroughly studied
and that the legislators did not conduct public hearings nor consultations with the
DPWH-ARMM.
5. In their comment, the respondents argued that it was in accordance with EO 124 and that the
powers of the autonomous regions did not diminish the legislative power of Congress.

Issue:
Whether or not the assailed RA 8999 and DO 119 run afoul of the ARMM Organic Acts (RA
6074 amended by RA 9054) giving regional autonomy to the region. YES.

Ruling:
Regional Autonomy under RA 6734 and RA 9054:
The 1987 Constitution mandates regional autonomy to give a bold and unequivocal answer to
the cry for a meaningful, effective and forceful autonomy. According to Commissioner Jose
Nolledo, Chairman of the Committee which drafted the provisions, it "is an indictment against
the status quo of a unitary system that, to my mind, has ineluctably tied the hands of progress
in our country . . . our varying regional characteristics are factors to capitalize on to attain
national strength through decentralization."

The idea behind the Constitutional provisions for autonomous regions is to allow the separate
development of peoples with distinctive cultures and traditions. These cultures, as a matter of
right, must be allowed to flourish.

Autonomy, as a national policy, recognizes the wholeness of the Philippine society in its
ethnolinguistic, cultural, and even religious diversities. It strives to free Philippine society of the
strain and wastage caused by the assimilationist approach. Policies emanating from the
legislature are invariably assimilationist in character despite channels being open for minority
representation. As a result, democracy becomes an irony to the minority group.

The need for regional autonomy is more pressing in the case of the Filipino Muslims and the
Cordillera people who have been fighting for it. Their political struggle highlights their unique
cultures and the unresponsiveness of the unitary system to their aspirations.51 The Moros'
struggle for self-determination dates as far back as the Spanish conquest in the Philippines.
Even at present, the struggle goes on.

Perforce, regional autonomy is also a means towards solving existing serious peace and
order problems and secessionist movements. Parenthetically, autonomy, decentralization and
regionalization, in international law, have become politically acceptable answers to intractable
problems of nationalism, separatism, ethnic conflict and threat of secession.

However, the creation of autonomous regions does not signify the establishment of a
sovereignty distinct from that of the Republic, as it can be installed only "within the framework
of this Constitution and the national sovereignty as well as territorial integrity of the Republic
of the Philippines."

Regional autonomy is the degree of self-determination exercised by the local government unit
vis-à-vis the central government.

In international law, the right to self-determination need not be understood as a right to

political separation, but rather as a complex net of legal-political relations between a certain
people and the state authorities. It ensures the right of peoples to the necessary level of
autonomy that would guarantee the support of their own cultural identity, the establishment of
priorities by the community's internal decision-making processes and the management of
collective matters by themselves.

If self-determination is viewed as an end in itself reflecting a preference for homogeneous,

independent nation-states, it is incapable of universal application without massive disruption.
However, if self-determination is viewed as a means to an end—that end being a democratic,
participatory political and economic system in which the rights of individuals and the identity of
minority communities are protected—its continuing validity is more easily perceived.

Regional autonomy refers to the granting of basic internal government powers to the people of
a particular area or region with least control and supervision from the central government.

The objective of the autonomy system is to permit determined groups, with a common
tradition and shared social-cultural characteristics, to develop freely their ways of life and
heritage, exercise their rights, and be in charge of their own business. This is achieved
through the establishment of a special governance regime for certain member communities
who choose their own authorities from within the community and exercise the jurisdictional
authority legally accorded to them to decide internal community affairs.

In the Philippine setting, regional autonomy implies the cultivation of more positive means for
national integration. It would remove the wariness among the Muslims, increase their trust in
the government and pave the way for the unhampered implementation of the development
programs in the region.

A necessary prerequisite of autonomy is decentralization.

Decentralization is a decision by the central government authorizing its subordinates, whether

geographically or functionally defined, to exercise authority in certain areas. It involves
decision-making by subnational units. It is typically a delegated power, wherein a larger
government chooses to delegate certain authority to more local governments. Federalism
implies some measure of decentralization, but unitary systems may also decentralize.
Decentralization differs intrinsically from federalism in that the sub-units that have been
authorized to act (by delegation) do not possess any claim of right against the central
government.

Decentralization comes in two forms—deconcentration and devolution. Deconcentration is

administrative in nature; it involves the transfer of functions or the delegation of authority and
responsibility from the national office to the regional and local offices. This mode of
decentralization is also referred to as administrative decentralization.
Devolution, on the other hand, connotes political decentralization, or the transfer of powers,
responsibilities, and resources for the performance of certain functions from the central
government to local government units. This is a more liberal form of decentralization since
there is an actual transfer of powers and responsibilities. It aims to grant greater autonomy to
local government units in cognizance of their right to self-government, to make them
self-reliant, and to improve their administrative and technical capabilities.

Concept of autonomy in Limbona v. Mangelin:

Autonomy is either decentralization of administration or decentralization of power.
There is 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.

Decentralization of power, on the other hand, involves an abdication of political power in

the favor of local government 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.

In the case, the Court reviewed the expulsion of a member from the Sangguniang
Pampook, Autonomous Region. It held that the Court may assume jurisdiction as the
local government unit, organized before 1987, enjoys autonomy of the former category.
It refused, though, to resolve whether the grant of autonomy to Muslim Mindanao under
the 1987 Constitution involves, truly, an effort to decentralize power rather than mere
administration.

Cordillera Broad Coalition v. Commission on Audit:

The Court, with the same composition, ruled without any dissent that the creation of
autonomous regions contemplates the grant of political autonomy—an autonomy which
is greater than the administrative autonomy granted to local government units. It held
that "the constitutional guarantee of local autonomy in the Constitution (Art. X, Sec. 2)
refers to administrative autonomy of local government units or, cast in more technical
language, the decentralization of government authority…. On the other hand, 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 to these regions."

And by regional autonomy, the framers intended it to mean "meaningful and authentic regional
autonomy." As articulated by a Muslim author, substantial and meaningful autonomy is "the
kind of local self-government which allows the people of the region or area the power to
determine what is best for their growth and development without undue interference or
dictation from the central government."

To this end, Section 16, Article X75 limits the power of the President over autonomous
regions. In essence, the provision also curtails the power of Congress over autonomous
regions. Consequently, Congress will have to re-examine national laws and make sure that
they reflect the Constitution's adherence to local autonomy. And in case of conflicts, the
underlying spirit which should guide its resolution is the Constitution's desire for genuine local
autonomy.

SUMMARY:

What is regional autonomy under the Organic Acts?

1. The passage of the ARMM Organic Acts recognizes the need to acknowledge the Philippines’
ethnolinguistic, cultural and religious diversity, conferring to those in Muslim Mindanao and the
Cordillera a measure of legal self-sufficiency and self-government.
2. However, the creation of autonomous regions does not signify the establishment of a
sovereignty distinct from that of the Republic, as it can be installed only within the framework of
the Constitution.
3. Regional autonomy refers to the granting of basic internal government powers to the people of
a particular area or region with least control and supervision from the central government.
4. The objective of the autonomy system is to permit determined groups, with a common tradition
and shared social-cultural characteristics, to develop freely their ways of life and heritage,
exercise their rights, and be in charge of their own business.
1. This is achieved through the establishment of a special governance regime for certain
member communities who choose their own authorities from within the community and
exercise the jurisdictional authority legally accorded to them to decide internal
community affairs.
5. A necessary prerequisite of autonomy is decentralization, which is a decision by the central
government authorizing its subordinates, whether geographically or functionally defined, to
exercise authority in certain areas. It involves decision-making by subnational units.
6. Decentralization comes in two forms: deconcentration and devolution.
1. Deconcentration is administrative in nature. It involves the transfer of functions or the
delegation of authority and responsibility. It is also known as administrative
decentralization.
2. Devolution connotes political decentralization, or the transfer of powers, responsibilities
and resources to LGUs, granting greater autonomy.
7. The creation of the autonomous regions in Muslim Mindanao and the Cordilleras contemplates
devolution, granting political autonomy and not just administrative autonomy.
8. To this end, Section 16, Article X of the Constitution limits the power of the President over the
regions. In essence, the provision also curtails the power of Congress over the autonomous
regions.

So what does this mean re: the two assailed provisions?

1. The fact that these regions were given regional autonomy means that the Muslims in Mindanao
are to be given freedom and independence with minimum interference from the National
Government.
1. This necessarily includes the freedom to decide on, build, supervise and maintain the
public works and infrastructure projects within the autonomous region.
 2. The devolution of the powers and functions of the DPWH in the ARMM and transfer of
the administrative and fiscal management of public works and funds are meant to be
true, meaningful and unfettered.
2. This is also supported by the provisions which specify the powers of the ARG (Sections 18 and
20, Article X of the Constitution), which indicate that the area of public works is not excluded
and neither is it reserved for the National Government.

Legality of RA 8999

1. R.A. 8999 takes away the control of the ARG, allowing for the National Government to again
take control. The challenged law creates an office with functions and powers which, by virtue of
E.O. 426, have been previously devolved to the DPWH-ARMM, First Engineering District in
Lanao del Sur.
2. E.O. 426 clearly ordains the transfer of the control and supervision of the offices of the DPWH
within the ARMM, including their functions, powers and responsibilities, personnel, equipment,
properties, and budgets to the ARG.
3. The continued enforcement of R.A. 8999, therefore, runs afoul of the ARMM Organic Acts and
results in the recall of powers which have previously been handed over.

Legality of DO 119

1. DO 119 is also legally infirm for having essentially created the same office as the
DPWH-ARMM First Engineering District. The department order, in effect, takes back powers
which have been previously devolved under EO 426. Thus, DO 119 runs counter to the
provisions of EO 426.
2. The DPWH’s order cannot rise higher than its source of power, the Executive.
3. In any event, the ARMM Organic Acts and their ratification in a plebiscite in effect superseded
EO 124. In case of an irreconcilable conflict between two laws of different vintages, the later
enactment prevails because it is the later legislative will.
4. Further, in its repealing clause, RA 9054 states that all laws, decrees, orders, rules and
regulations, and other issuances or parts thereof, which are inconsistent with this Organic Act,
are hereby repealed or modified accordingly.
5. With the repeal of EO 124 which is the basis of DO 119, it necessarily follows that DO 119 was
also rendered functus officio by the ARMM Organic Acts.

9.) Batangas CATV, Inc. v. Court of Appeals (G.R. No. 138810, 29 September 2004)

Doctrine: The devolution of powers to the LGUs, pursuant to the Constitutional mandate of
ensuring their autonomy, has bred jurisdictional tension between said LGUs and the State.
LGUs must be reminded that they merely form part of the whole. Thus, when the Drafters of
the 1987 Constitution enunciated the policy of ensuring the autonomy of local governments, it
was never their intention to create an imperium in imperio and install an intra-sovereign
political subdivision independent of a single sovereign state.

Facts: In July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210
granting petitioner a permit to construct, install, and operate a CATV system in Batangas City.
Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the
maximum rates specified therein, “provided, however, that any increase of rates shall be
subject to the approval of the Sangguniang Panlungsod.
And sometime in November 1993, petitioner increased its subscriber rates from P88.00 to
P180.00 per month. As a result, respondent Mayor wrote petitioner a letter threatening to
cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod,
pursuant to Resolution No. 210. Respondent argues that Resolution was enacted pursuant to
Sec. 177 (c) & (d) of BP 337 (LGC of 1983) which authorizes LGUs to regulate businesses
and is in the nature of a contract between Petitioner and Respondent.

Petitioner then filed with the RTC of Batangas City, a petition for injunction alleging that
respondent Sangguniang Panlungsod has no authority to regulate the subscriber rates
charged by CATV operators because under Executive Order No. 205, the National
Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation
in the Philippines.

RTC: Decided in favor of petitioner and held that the enactment of Resolution No. 210 by
respondent violates the State’s deregulation policy as set forth by then NTC Commissioner
Alcuaz in his Memorandum. Also, it pointed out that the sole agency of the government which
can regulate CATV operation is the NTC, and that the LGUs cannot exercise regulatory power
over it without appropriate legislation.

CA: Reversed and set aside the trial court’s Decision. It held that the regulation of businesses
in the locality is expressly provided in the Local Government Code. That the fixing of service
rates is lawful under the General Welfare Clause. Hence, Resolution No. 210 granting
appellee a permit to construct, install and operate a community antenna television (CATV)
system in Batangas City, which authorized the grantee to impose charges cannot be
increased except upon approval of the Sangguniang Bayan.

Issue: Whether or not the CA erred in holding that the General Welfare Clause of the Local
Government Code authorizes Sangguniang Panglungsod to exercise regulatory function
solely lodged with the NTC, including the Authority to fix and approve the service rates of
CATV operations?

Ruling: Yes. While the Court recognizes the LGUs power under the general welfare clause, it
cannot sustain Resolution No. 210. The court is convinced that the respondents strayed from
the well-recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the
mandate of existing laws and (2) it violates the States deregulation policy over the CATV
industry.

The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205 and E.O. No.
436 insofar as it permits respondent Sangguniang Panlungsod to usurp a power exclusively
vested in the NTC, i.e., the power to fix the subscriber rates charged by CATV operators. The
fixing of subscriber rates is definitely one of the matters within the NTCs exclusive domain.

Deregulation is the reduction of government regulation of business to permit freer markets

and competition. Oftentimes, the State, through its regulatory agencies, carries out a policy of
deregulation to attain certain objectives or to address certain problems. In the field of
telecommunications, it is recognized that many areas in the Philippines are still unserved or
underserved. Thus, to encourage private sectors to venture in this field and be partners of the
government in stimulating the growth and development of telecommunications, the State
promoted the policy of deregulation.
Further, the devolution of powers to the LGUs, pursuant to the Constitutional mandate of
ensuring their autonomy, has bred jurisdictional tension between said LGUs and the State.
LGUs must be reminded that they merely form part of the whole. Thus, when the Drafters of
the 1987 Constitution enunciated the policy of ensuring the autonomy of local governments, it
was never their intention to create an imperium in imperio and install an intra-sovereign
political subdivision independent of a single sovereign state.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals as
well as its Resolution, are REVERSED. And the RTC Decision in Civil Case No. 4254 is
AFFIRMED.

III. Powers of the President over LGUs (Cases)

10.) Judge Dadole v. Commission on Audit (G.R. No. 125350, December 3, 2002)

Doctrine: The President can only interfere in the affairs and activities of a local government
unit if he or she finds that the latter has acted contrary to law. This is the scope of the
President’s supervisory powers over local government units.

Facts: RTC and MTC judges of Mandaue City started receiving monthly allowances, each
through the yearly appropriation ordinance enacted by the Sangguniang Panlungsod of the
said city. It was further increased for each judge.

the Department of Budget and Management (DBM) issued the disputed Local Budget Circular

2.3.2. In the light of the authority granted to the local government units under
the Local Government Code to provide for additional allowances and other
benefits to national government officials and employees assigned in their
locality, such additional allowances in the form of honorarium at rates not
exceeding P1,000.00 in provinces and cities and P700.00 in municipalities may
be granted subject to the following conditions:

a) That the grant is not mandatory on the part of the LGUs;

b) That all contractual and statutory obligations of the LGU including the
implementation of R.A. 6758 shall have been fully provided in the budget;

c) That the budgetary requirements/limitations under Section 324 and 325 of

R.A. 7160 should be satisfied and/or complied with; and

d) That the LGU has fully implemented the devolution of functions/personnel in

accordance with R.A. 7160.

Acting on the DBM's Local Budget Circular No. 55, the Mandaue City Auditor issued notices of
disallowances to RTC and MTC Judges, in excess of the amount (maximum of P1000 and
P700 in provinces and cities and municipalities, respectively) authorized by said circular. The
additional monthly allowances of the judges shall be reduced to P1000 each. They were also
asked to reimbursed the amount they received in excess of P1000 from the last six months.
It was opposed by petitioner judges who filed with the Office of the City Auditor a protest
against the notices of disallowance. But the City Auditor treated the protest as a motion for
reconsideration and indorsed the same to the COA Regional Office No. 7. In turn, the COA
Regional Office referred the motion to the head office with a recommendation that the same
be denied.

Accordingly, it was denied by the COA. Hence, petitioners filed the instant petition. They
argued, among others, that LBC 55 is void for infringing on the local autonomy of Mandaue
City by dictating a uniform amount that a local government unit can disburse as additional
allowances to judges stationed therein.

Issue: Whether or not Local Budget Circular No. 55 void for going beyond the supervisory
powers of the President

Ruling: Yes. Although the Constitution guarantees autonomy to local government units, the
exercise of local autonomy remains subject to the power of control by Congress and the
power of supervision by the President. Sec 4 Art X of 1987 Constitution: "The President of the
Philippines shall exercise general supervision over local governments. x x x" The said
provision has been interpreted to exclude the power of control.

The President can only interfere in the affairs and activities of a local government unit if he or
she finds that the latter has acted contrary to law. This is the scope of the President’s
supervisory powers over local government units. Hence, the President or any of his or her
alter egos cannot interfere in local affairs as long as the concerned local government unit acts
within the parameters of the law and the Constitution. Any directive therefore by the President
or any of his or her alter egos seeking to alter the wisdom of a law-conforming judgment on
local affairs of a local government unit is a patent nullity because it violates the principle of
local autonomy and separation of powers of the executive and legislative departments in
governing municipal corporations.

11.) Pimentel v. Aguirre, et al. (G.R. No. 132988, July 19, 2000), in relation to Secs.
284-294, LGC

Doctrine:
The Constitution vests the President with the power of supervision, not control, over local
government units (LGUs). Such power enables him to see to it that LGUs and their officials
execute their tasks in accordance with law. While he may issue advisories and seek their
cooperation in solving economic difficulties, he cannot prevent them from performing their
tasks and using available resources to achieve their goals. He may not withhold or alter any
authority or power given them by the law. Thus, the withholding of a portion of internal
revenue allotments legally due them cannot be directed by administrative fiat.

Facts:
This case is a petition for certiorari and prohibition seeking to (1) to annul Section 1 of
Administrative Order (AO) No. 372, insofar as it requires local government units to reduce
their expenditures by 25 percent of their authorized regular appropriations for non-personal
services; and (2) to enjoin respondents from implementing Section 4 of the Order, which
withholds a portion of their internal revenue allotments.
December 27, 1997, Fidel Ramos issued AO 372 which is the adoption of economy measures
in government for FY 1998. As to its section 1, it requires that All government departments
and agencies, including state universities and colleges, government-owned and controlled
corporations and local governments units will identify and implement measures in FY 1998
that will reduce total expenditures for the year by at least 25% of authorized regular
appropriations for non-personal services items, along the following suggested area
enumerated. Moreover, as to the section 4, Pending the assessment and evaluation by the
Development Budget Coordinating Committee of the emerging fiscal situation, the amount
equivalent to 10% of the internal revenue allotment to local government units shall be
withheld. On December 10, 1998 President Estrada issued AO 43 amending section 4 by
reducing it to 5% the amount of total internal revenue allotment to be withheld from the LGUs.

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

But respondent, Office of Solicitor General claims that 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. 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. Likewise, the withholding of 10 percent of the LGUs’ IRA does not violate the
statutory prohibition on the imposition of any lien or holdback ofn their revenue shares,
because such withholding is "temporary in nature pending the assessment and evaluation by
the Development Coordination Committee of the emerging fiscal situation."

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:

1. For Section 1 of AO 372: A MERE ADVISORY IN CHARACTER

As provided by Section 284 of the Local government Code, There are several requisites
before the President may interfere in local fiscal matters: (1) an unmanaged public sector
deficit of the national government; (2) consultations with the presiding officers of the Senate
and the House of Representatives and the presidents of the various local leagues; and (3) the
corresponding recommendation of the secretaries of the Department of Finance, Interior and
Local Government, and Budget and Management. Furthermore, any adjustment in the
allotment shall in no case be less than thirty percent (30%) of the collection of national internal
revenue taxes of the third fiscal year preceding the current one.
While the wordings of Section 1 of AO 372 have a rather commanding tone, and while Sc
agree with petitioner that the requirements of Section 284 of the Local Government Code
have not been satisfied, still SC accepts the solicitor general's assurance that the directive to
"identify and implement measures x x x that will reduce total expenditures x x x by at least
25% of authorized regular appropriation" is merely advisory in character, and does not
constitute a mandatory or binding order that interferes with local autonomy. The language
used, while authoritative, does not amount to a command that emanates from a boss to
a subaltern.

Rather, the provision is merely an advisory to prevail upon local executives to recognize the
need for fiscal restraint in a period of economic difficulty. Indeed, all concerned would do well
to heed the President's call to unity, solidarity and teamwork to help alleviate the crisis. It is
understood, however, that no legal sanction may be imposed upon LGUs and their
officials who do not follow such advice. It is in this light that SC sustain the solicitor
general's contention in regard to Section 1.

2. For Section 4 of AO 372 amended by AO 43: NOT VALID

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 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.

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.

In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of national
crisis, Section 4 thereof has no color of validity at all. The latter provision effectively
encroaches on the fiscal autonomy of local governments. Concededly, the President was
well-intentioned in issuing his Order to withhold the LGUs’ IRA, but the rule of law requires
that even the best intentions must be carried out within the parameters of the Constitution and
the law. Verily, laudable purposes must be carried out by legal methods.

12.) Province of Batangas v. Romulo (G.R. No. 152774, 27 May 2004)

Doctrine: Consistent with the principle of local autonomy, the Constitution confines the
President's power over the LGUs to one of general supervision.

This provision has been interpreted to exclude the power of control. The distinction between
the two powers was enunciated in Drilon v. Lim:
An officer in control lays down the rules in the doing of an act. If they are not followed, he
may, in his discretion, order the act undone or re-done by his subordinate or he may even
decide to do it himself.

Supervision does not cover such authority.

The supervisor or superintendent merely sees to it that the rules are followed, but he himself
does not lay down such rules, nor does he have the discretion to modify or replace them. If
the rules are not observed, he may order the work done or re-done but only to conform to the
prescribed rules. He may not prescribe his own manner for doing the act. He has no judgment
on this matter except to see to it that the rules are followed.

Petitioner - Province of Batangas, represented by its Gov. Mandanas

Respondents - Hon. Romulo (Exec. Secretary and Chairman of the Oversight Committee on
Devolution;

FACTS: President Joseph Ejercito Estrada issued E.O. No. 48 entitled “ESTABLISHING A
PROGRAM FOR DEVOLUTION ADJUSTMENT AND EQUALIZATION” which was later
renamed as the LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF). The
program was established to “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.” The
Oversight Committee constituted under Section 533(b) of Republic Act No. 7160 or The Local
Government Code of 1991, has been tasked to formulate and issue the appropriate rules and
regulations necessary for its effective implementation.

Thereafter the Oversight Committee issued Resolutions.

Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to the individual
members of the Oversight Committee seeking the reconsideration of Resolution No.
OCD-2002-001. He also wrote to Pres. Macapagal-Arroyo urging her to disapprove said
resolution as it violates the Constitution and the Local Government Code of 1991.

On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-2002-001.

The petitioner submits that the assailed provisos in the GAAs and the OCD resolutions,
insofar as they earmarked the amount of five billion pesos of the IRA of the LGUs for 1999,
2000 and 2001 for the LGSEF and imposed conditions for the release thereof, violate the
Constitution and the Local Government Code of 1991.

The 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."
Significantly, the LGSEF could not be released to the LGUs without the Oversight
Committee's prior approval.
Further, with respect to the portion of the LGSEF allocated for various projects of the LGUs
(P1 billion for 1999; P1.5 billion for 2000 and P2 billion for 2001), 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
(a) the LGUs to identify the projects eligible for funding based on the criteria laid down by
the Oversight Committee;
(b) the LGUs to submit their project proposals to the DILG for appraisal;
(c) the project proposals that passed the appraisal of the DILG to be submitted to the
Oversight Committee for review, evaluation and approval. It was only upon approval
thereof that the Oversight Committee would direct the DBM to release the funds for the
projects.

PETITIONER’s CONTENTION: Sec. 6 Article X of the Constitution is invoked as it mandates

that the "just share" of the LGUs shall be automatically released to them. 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.

RESPONDENT CONTENTION: 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. Moreover, 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. In other
words, Congress is the arbiter of what should be the "just share" of the LGUs in the national
taxes.

The respondents further theorize that Section 285 of the Local Government Code of 1991,
which provides for the percentage sharing of the IRA among the LGUs, was not intended to
be a fixed determination of their "just share" in the national taxes. Congress may enact other
laws, including appropriations laws such as the GAAs of 1999, 2000 and 2001, providing for a
different sharing formula.

ISSUE: Whether the assailed provisos contained in the GAAs of 1999, 2000 and 2001, and
the OCD resolutions violate the Constitution and the Local Government Code of 1991.

RULING: Yes, the assailed provisos violate the Constitution and the Local Government Code
of 1991.

Under Section 6, Article X of the Constitution, local government units shall have a just
share, as determined by law, in the national taxes which shall be automatically released
to them.
When parsed, it would be readily seen that this provision mandates that
(1) the LGUs shall have a "just share" in the national taxes;
(2) the "just share" shall be determined by law; and
(3) the "just share" shall be automatically released to the LGUs.

In the case of PIMENTEL v. AGUIRRE, the Court ruled that 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.

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.

Local autonomy includes both administrative and fiscal autonomy.

In Pimentel v. Aguirre, Court declared therein that local fiscal autonomy includes the power
of the LGUs to allocate their resources in accordance with their own priorities.
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.

Further, a basic feature of local fiscal autonomy is the constitutionally mandated automatic
release of the shares of LGUs in the national internal revenue.

Also, in 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% and Section
285 on the allocation to Local Government Units in the internal revenue allotment.

In the case at bar, the respondent put on hold the distribution and release of the five billion
pesos LGSEF and subject the same to the implementing rules and regulations, including the
guidelines and mechanisms prescribed by the Oversight Committee from time to time. Like
Section 4 of A.O. 372, the assailed provisos in the GAAs of 1999, 2000 and 2001 and the
OCD resolutions effectively encroach on the fiscal autonomy enjoyed by the LGUs and must
be struck down.

Therefore, the provisos violates the Constitution and the Local Government Code.

RELATED TOPICS:

★ Consistent with the principle of local autonomy, the Constitution confines the
President's power over the LGUs to one of general supervision.

This provision has been interpreted to exclude the power of control. The distinction between
the two powers was enunciated in Drilon v. Lim:

An officer in control lays down the rules in the doing of an act. If they are not followed, he
may, in his discretion, order the act undone or re-done by his subordinate or he may even
decide to do it himself.
Supervision does not cover such authority.
The supervisor or superintendent merely sees to it that the rules are followed, but he himself
does not lay down such rules, nor does he have the discretion to modify or replace them. If
the rules are not observed, he may order the work done or re-done but only to conform to the
prescribed rules. He may not prescribe his own manner for doing the act. He has no judgment
on this matter except to see to it that the rules are followed.

★ The concept of local autonomy was explained in Ganzon v. Court of Appeals:

● local autonomy 'means a more responsive and accountable local government structure
instituted through a system of decentralization.'
● Decentralization means devolution of national administration — but not power — to the
local levels. Thus:
○ autonomy is either decentralization of administration or decentralization of
power.
○ There is 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.'
 ○ Decentralization of power, on the other hand, involves an abdication of
political power in the [sic] favor of local governments [sic] 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
'selfimmolation,' since in that event, the autonomous government becomes
accountable not to the central authorities but to its constituency.

13.) ACORD v. Zamora (G.R. No. 144256, 08 June 2005)

DOCTRINE: As the Constitution lays upon the executive the duty to automatically release the
just share of local governments in the national taxes, so it enjoins the legislature not to pass
laws that might prevent the executive from performing its duty

FACTS: Pursuant to Section 22, Article VII of the Constitution mandating the President to
submit to Congress a budget of expenditures within thirty days before the opening of every
regular session, then President Joseph Ejercito Estrada submitted the National Expenditures
Program for Fiscal Year 2000.

Estrada approved House Bill No. 8374, which became Republic Act No. 8760 or otherwise
known as the General Appropriations Act (GAA) for the Year 2000. The Act provided, among
others, the allocation of IRA to the local government units. Also, under the heading
“UNPROGRAMMED FUND”, an amount of P10 billion shall be used to fund the Internal
Revenue Allotment (IRA), which amount shall be released only when the original revenue
targets submitted by the President to Congress can be realized based on a quarterly
assessment to be conducted by certain committees.

Thus, while the GAA appropriates P111,778,000,000 of IRA as Programmed Fund, it

appropriates a separate amount of P10 Billion of IRA under the classification of
Unprogrammed Fund, the latter amount to be released only upon the occurrence of the
condition stated in the GAA.

The constitutionality of the above-qouted provisions were challenged by petitioner ACORD et

al alleging that it violated the Constitutional mandate in Article X, Section 6 that the Local
government units shall have a just share, as determined by law, in the national taxes which
shall be automatically released to them.

Petitioner ACORD’s CONTENTION Respondents ZAMORA’S ET AL

CONTENTION

The GAA violated this constitutional The constitutional provision is addressed

mandate when it made the release of IRA
contingent on whether revenue collections
could meet the revenue targets originally
submitted by the President, rather than
making the release automatic.
not to the legislature but to the executive,
hence, the same does not prevent the
legislature from imposing conditions upon
the release of the IRA.
ISSUE: WON the executive or the legislative has the power to withhold the release of the IRA

RULING: NO, under Article X, Section 6 of the Constitution, only the just share of local
governments is qualified by the words “as determined by law,” and not the release thereof, the
plain implication is that Congress is not authorized by the Constitution to hinder or impede the
automatic release of the IRA.

In the Province of Batangas v. Romulo, the petitioner therein challenged the

constitutionality of certain provisos of the GAAs for FY 1999, 2000, and 2001 which set up the
Local Government Service Equalization Fund (LGSEF). The LGSEF was a portion of the IRA
which was to be released only upon a finding of the Oversight Committee on Devolution that
the LGU concerned had complied with the guidelines issued by said committee. This Court
measured the challenged legislative acts against Article X, Section 6 and declared them
unconstitutional—a ruling which presupposes that the legislature, like the executive, is
mandated by said constitutional provision to ensure that the just share of local governments in
the national taxes are automatically released. Respondents, in further support of their claim
that the automatic release requirement in the Constitution constrains only the executive
branch and not the legislature.

The Court interpreted Article X, Section 6 of the Constitution that this provision mandates that
(1) the LGUs shall have a “just share” in the national taxes; (2) the “just share” shall be
determined by law; and (3) the “just share” shall be automatically released to the LGUs.

The Court further held that 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.

In Pimentel v. Aguirre, the executive withheld the release 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. This Court ruled that such withholding
contravened the constitutional mandate of an automatic release, viz.: Section 4 of AO 372
cannot, however, be upheld. 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.”

(Note: here it is the legislature while in Pimentel it is the executive, which has authorized the
withholding of the IRA)

EXCEPTION TO AUTOMATIC RELEASE:

The only possible exception to mandatory automatic release of the IRA is, as held in
Batangas: . . . 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.

Thus, the questioned provisions are declared unconstitutional.

14.) Kida v. Senate of the Philippines (G.R. No. 196271, 18 October 2011; and Resolution
dated 28 February 2012)

Doctrine: The President has the power to appoint officers-in-charge to occupy offices in local
government who shall perform specific functions until such time that officials duly elected to a
position shall have qualified and assumed office.

Facts: RA No. 6734 or "An Act Providing for an Organic Act for the Autonomous Region in
Muslim Mindanao (ARMM) was enacted two years after the effectivity of the 1987
Constitution. Lanao del Sur, Maguindanao, Sulu and Tawi-tawi initially approved of the Act.
RA 6734 scheduled the first regular elections for the officials of ARMM not earlier than 60
days nor later than 90 days after its ratification.

RA No. 9054 was passed to further enhance the structure of ARMM under RA No. 6734,
resetting the elections to Monday of September 2001. RA No. 9333 was subsequently passed
by Congress to reset the ARMM regional elections to the 2nd Monday of August 2005, and on
the same date every three years. Unlike RA 6734 and 9054, RA 9333 was not ratified in a
plebiscite.

As per RA 9333, the next ARMM regional elections should have been held on August 8, 2011.
Despite preparations held by COMELEC, RA. No. 10153 was enacted to yet again reset the
ARMM elections to May 2013, simultaneous with the regular national and local elections.

The Court then issued a TRO enjoining the implementation of RA 10153, and ordered the
incumbents to continue to perform their functions should the case not reach a resolution by
the end of their term.

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; also
cited as grounds are the alleged violations of the right of suffrage of the people of ARMM, as
well as the failure to adhere to the "elective and representative" character of the executive and
legislative departments of the ARMM.

Lastly, the petitioners challenged the grant to the President of the power to appoint Officers in
Charge (OICs) to undertake the functions of the elective ARMM officials until the officials
elected under the May 2013 regular elections shall have assumed office. Corrolarily, they also
argue that the power of appointment also gave the President the power of control over the
ARMM, in complete violation of Section 16, Article X of the Constitution.

Issues:

Whether or not the 1987 Constitution mandates the synchronization of elections (YES)
2. Whether or not it is valid for the President to appoint OICs to govern ARMM during the
pre-synchronization period
3.
Ruling:

1. YES, the Constitution mandates synchronization of elections. The Court is in favor of the
Office of the Solicitor General on such, citing Sections 1, 2 and 5, Article XVIII (Transitory
Provisions) of the 1987 Constitution. While the Constitution does not expressly state that
Congress has to synchronize national and local elections, the clear intent towards this
objective can be gleaned from the Transitory Provisions (Article XVIII) of the Constitution,
which show the extent to which the Constitutional Commission, by deliberately making
adjustments to the terms of the incumbent officials, sought to attain synchronization of
elections.

The Court cited Osmena v. COMELEC, to wit:

“It is clear from the aforequoted provisions of the 1987 Constitution that the terms of office of
Senators, Members of the House of Representatives, the local officials, the President and the
VicePresident have been synchronized to end on the same hour, date and year noon of June
30, 1992.

It is likewise evident from the wording of the above-mentioned Sections that the term of
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.This
common termination date will synchronize future elections to once every three years.”
Understood in its ordinary sense, the word "local" refers to something that primarily serves
the needs of a particular limited district, often a community or minor political subdivision.
Regional elections in the ARMM for the positions of governor, vice-governor and regional
assembly representatives obviously fall within this classification, since they pertain to the
elected officials who will serve within the limited region of ARMM.
From the perspective of the Constitution, autonomous regions are considered one of the
forms of local governments, as evident from Article X of the Constitution entitled "Local
Government."

2. YES, it is valid for the President to appoint OICs. It is within the power of the President to
"appoint officers-in-charge (OICs) for the Office of the Regional Governor, the Regional
Vice-Governor, and the 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" pursuant to what is stated under RA No. 10153.

The appointing power is embodied in Section 16, Article VII of the Constitution, which states:

Section 16. The President shall nominate and, with the consent of the Commission on
Appointments, appoint the heads of the executive departments, ambassadors, other public
ministers and consuls or officers of the armed forces from the rank of colonel or naval captain,
and other officers whose appointments are vested in him in this Constitution. He shall also
appoint all other officers of the Government whose appointments are not otherwise
provided for by law, and those whom he may be authorized by law to appoint. The
Congress may, by law, vest the appointment of other officers lower in rank in the President
alone, in the courts, or in the heads of departments, agencies, commissions, or boards.

RA No. 10153, does not in any way amend what the organic law of the ARMM (RA No. 9054)
sets out in terms of structure of governance. This power is far different from appointing
elective ARMM officials for the abbreviated term ending on the assumption to office of the
officials elected in the May 2013 elections. It must be therefore emphasized that the law must
be interpreted as an interim measure to synchronize elections and must not be interpreted
otherwise. Aside from its order for synchronization, it is purely and simply an interim measure
responding to the adjustments that the synchronization requires.

15.) Gov. Villafuerte, Jr., and Prov. Of Camsur v. Robredo, G.R. No. 195390, 10
December 2014

Doctrine:

Facts: In 1995, the Commission on Audit (COA) conducted an examination and audit on the
manner the local government units utilized their Internal Revenue Allotment (IRA) for the
calendar years 1993-1994. 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 Section 287 of R.A.
No. 7160, otherwise known as the Local Government Code of 1991 (LGC).

In 2010, Jesse Robredo, in his capacity as DILG Secretary, issued the assailed Memorandum
Circular (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 MC requires the posting within 30 days from
the end of each fiscal year in at least three (3) publicly accessible and conspicuous places in
the local government unit a summary of all revenues collected and funds received including
the appropriations and disbursements of such funds during the preceding fiscal year.

The foregone circular also states that non-compliance will be meted sanctions in accordance
with pertinent laws, rules and regulations. On December 2, 2010, the Robredo issued another
MC, 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 life for all. It also enumerated a list for which the fund must not be utilized.

Villafuerte, then Governor of Camarines Sur, joined by the Provincial Government of

Camarines Sur, filed the instant petition for certiorari, seeking to nullify the assailed issuances
of the respondent for being unconstitutional for violating the principles of local and fiscal
autonomy enshrined in the Constitution and the LGC.

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. In particular, they
claim that MC No. 2010-138 transgressed these constitutionally-protected liberties when it
restricted the meaning of "development" and enumerated activities which the local
government must finance from the 20% development fund component of the IRA and
provided sanctions for local authorities who shall use the said component of the fund for the
excluded purposes stated therein. 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.

It is also the petitioners' contention that the respondent went beyond the confines of his
supervisory powers, as alter ego of the President, when he issued MC No. 2010-138. They
argue that the mandatory nature of the circular, with the threat of imposition of sanctions for
non-compliance, evinces a clear desire to exercise control over LGUs.

Issue: Whether or not the assailed MCs violate the principles of local and fiscal autonomy of
LGUs

Ruling: No.

The argument fails to persuade.

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

It is also pursuant to the mandate of the Constitution of enhancing local autonomy that the
LGC was enacted.

Section 2 thereof was a reiteration of the state policy. It reads, thus:

Sec. 2. Declaration of Policy. - (a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State shall enjoy genuine and meaningful local
autonomy to enable them to attain their fullest development as self-reliant communities and
make them more effective partners in the attainment of national goals. Toward this end, the
State shall provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units shall be given
more powers, authority, responsibilities, and resources. The process of decentralization shall
proceed from the national government to the local government units.

Verily, local autonomy means a more responsive and accountable local government structure
instituted through a system of decentralization

In Limbona v. Mangelin the Court elaborated on the concept of decentralization, thus:

[Autonomy is either decentralization of administration or decentralization of power. There is

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. xxx. Decentralization of power, on the other hand, involves an abdication of political
power in the favor of local governments [sic] 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. xxx

To safeguard the state policy on local autonomy, the Constitution confines the power of the
President over LGUs to mere supervision. "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. "

Thus, Section 4, Article X of the Constitution, states:

Section 4. The President of the Philippines shall exercise general supervision over local
governments. Provinces with respect to component cities and municipalities, and cities and
municipalities with respect to component barangays, shall ensure that the acts of their
component units are within the scope of their prescribed powers and functions.

In Province of Negros Occidental v. Commissioners, Commission on Audit, the Court

distinguished general supervision from executive control in the following manner:

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. 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. The power of control gives the President the
power to revise or reverse the acts or decisions of a subordinate officer involving the exercise
of discretion.

It is the petitioners' contention that the respondent went beyond the confines of his
supervisory powers, as alter ego of the President, when he issued MC No. 2010-138. They
argue that the mandatory nature of the circular, with the threat of imposition of sanctions for
non-compliance, evinces a clear desire to exercise control over LGUs.
The Court, however, perceives otherwise.

A reading of MC No. 2010-138 shows that it is a mere reiteration of an existing provision in the
LGC. It was plainly intended to remind LGUs to faithfully observe the directive stated in
Section 287 of the LGC to utilize the 20% portion of the IRA for development projects. It was,
at best, an advisory to LGUs to examine themselves if they have been complying with the law.
It must be recalled that the assailed circular was issued in response to the report of the COA
that a substantial portion of the 20% development fund of some LGUs was not actually utilized
for development projects but was diverted to expenses more properly categorized as MOO, in
violation of Section 287 of the LGC. This intention was highlighted in the very first paragraph
of MC No. 2010-138, which reads:

Section 287 of the Local Government Code mandates every local government to appropriate
in its annual budget no less than 20% of its annual revenue allotment for development
projects. In common understanding, development means the realization of desirable social,
economic and environmental outcomes essential in the attainment of the constitutional
objective of a desired quality of life for all.

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. The definition was a plain
characterization of the concept of development as it is commonly understood. The statement
of a general definition was only necessary to illustrate among LGUs the nature of expenses
that are properly chargeable against the development fund component of the IRA. It is
expected to guide them and aid them in rethinking their ways so that they may be able to
rectify lapses in judgment, should there be any, or it may simply stand as a reaffirmation of an
already proper administration of expenses.

The same clarification may be said of the enumeration of expenses in MC No. 2010-138. To
begin with, it is erroneous to call them exclusions because such a term signifies compulsory
disallowance of a particular item or activity. This is not the contemplation of the enumeration.
Again, it is helpful to retrace the very reason for the issuance of the assailed circular for a
better understanding. The petitioners should be reminded that the issuance of MC No.
2010-138 was brought about by the report of the CO that the development fund was not being
utilized accordingly. To curb the alleged misuse of the development fund, the respondent
deemed it proper to remind LGUs of the nature and purpose of the provision for the IRA
through MC No. 2010-138. To illustrate his point, he included the contested enumeration of
the items for which the development fund must generally not be used. The enumerated items
comprised the expenses which the COA perceived to have been improperly earmarked or
charged against the development fund based on the audit it conducted.

The petitioners likewise misread the issuance by claiming that the provision of sanctions
therein is a clear indication of the President's interference in the fiscal autonomy of LGUs. The
relevant portion of the assailed issuance reads, thus:

All local authorities are further reminded that utilizing the 20% component of the Internal
Revenue Allotment, whether willfully or through negligence, for any purpose beyond those
expressly prescribed by law or public policy shall be subject to the sanctions provided under
the Local Government Code and under such other applicable laws.
Significantly, the issuance itself did not provide for sanctions. It did not particularly establish a
new set of acts 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.
Nonetheless, this warning for possible imposition of sanctions did not alter the advisory nature
of the issuance. At any rate, LGUs must be reminded that the local autonomy granted to them
does not completely severe them from the national government or turn them into impenetrable
states. Autonomy does not make local governments sovereign within the stat.

In Ganzon v. Court of Appeals,47 the Court reiterated:

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 .

Thus, notwithstanding the local fiscal autonomy being enjoyed by LGUs, they are still under
the supervision of the President and maybe held accountable for malfeasance or violations of
existing laws. "Supervision is not incompatible with discipline. And the power to discipline and
ensure that the laws be faithfully executed must be construed to authorize the President to
order an investigation of the act or conduct of local officials when in his opinion the good of the
public service so requires.

Clearly then, the President's power of supervision is not antithetical to investigation and
imposition of sanctions.

In Hon. Joson v. Exec. Sec. Torres, the Court pointed out, thus: "Independently of any
statutory provision authorizing the President to conduct an investigation of the nature involved
in this proceeding, and in view of the nature and character of the executive authority with
which the President of the Philippines is invested, the constitutional grant to him of power to
exercise general supervision over all local governments and to take care that the laws be
faithfully executed must be construed to authorize him to order an investigation of the act or
conduct of the petitioner herein. Supervision is not a meaningless thing. It is an active power.
It is certainly not without limitation, but it at least implies authority to inquire into facts and
conditions in order to render the power real and effective. × xx.

As in MC No. 2010-138, the Court finds nothing in two other questioned issuances of the
respondent, i.e., MC Nos. 2010-83 and 2011-08, that can be construed as infringing on the
fiscal autonomy of LGUs. The petitioners claim that the requirement to post other documents
in the mentioned issuances went beyond the letter and spirit of Section 352 of the LGC and
R.A. No. 9184, otherwise known as the Government Procurement Reform Act, by requiring
that budgets, expenditures, contracts and loans, and procurement plans of LGUs be publicly
posted as well.

Finally, the Court believes that the supervisory powers of the President are broad enough to
embrace the power to require the publication of certain documents as a mechanism of
transparency.
In Pimentel,Jr. v. Hon. Aguirre, the Court reminded that local fiscal autonomy does not rule out
any manner of national government intervention by way of supervision, in order to ensure that
local programs, fiscal and otherwise, are consistent with national goals. The President, by
constitutional flat, is the head of the economic and planning agency of the government,
primarily responsible for formulating and implementing continuing, coordinated and integrated
social and economic policies, plans and programs for the entire country. Moreover, the
Constitution, which was drafted after long years of dictatorship and abuse of power, is now
replete with numerous provisions directing the adoption of measures to uphold transparency
and accountability in government, with a view of protecting the nation from repeating its
atrocious past. In particular, the Constitution commands the strict adherence to full disclosure
of information onall matters relating to official transactions and those involving public interest.

16.) Mandanas v. Ochoa, G.R. Nos. 199802, 03 July 2018

Doctrine:

Municipal corporations, being the mere creatures of the State, are subject to the will of
Congress, their creator. Their continued existence and the grant of their powers are
dependent on the discretion of Congress.

Facts:

The petitioners challenge the manner in which the just share in the national taxes of the local
government units (LGUs) has been computed.

Petitioners are assailing the manner the General Appropriations Act (GAA) for FY 2012
computed the IRA for the LGUs. Petitioners allege that certain collections of National
Internal Revenue Taxes (NIRTs) by the Bureau of Customs (BOC) – specifically: excise
taxes, value added taxes (VATs) and documentary stamp taxes (DSTs) – have not been
included in the base amounts for the computation of the IRA; that such taxes, albeit
collected by the BOC, should form part of the base from which the IRA should be
computed because they constituted NIRTs.

Implementing the constitutional mandate for decentralization and local autonomy, Congress
enacted Republic Act No. 7160, otherwise known as the Local Government Code (LGC), in
order to guarantee the fiscal autonomy of the LGUs by specifically providing that:

SECTION 284. Allotment of Internal Revenue Taxes. - Local government units shall have
a share in the national internal revenue taxes based on the collection of the third fiscal
year preceding the current fiscal year as follows:

(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

Provided, That in the event that the National Government incurs an unmanageable public
sector deficit, the President of the Philippines is hereby authorized, upon the
recommendation of Secretary of Finance, Secretary of Interior and Local
Government, and Secretary of Budget and Management, and subject to
consultation with the presiding officers of both Houses of Congress and the
presidents of the "liga", to make the necessary adjustments in the internal revenue
 allotment of local government units but in no case shall the allotment be less than thirty
percent (30%) of the collection of national internal revenue taxes of the third fiscal year
preceding the current fiscal year: Provided, further, That in the first year of the effectivity of
this Code, the local government units shall, in addition to the thirty percent (30%) internal
revenue allotment which shall include the cost of devolved functions for essential public
services, be entitled to receive the amount equivalent to the cost of devolved personal
services.

The share of the LGUs, heretofore known as the Internal Revenue Allotment (IRA), has been
regularly released to the LGUs. According to the implementing rules and regulations of the
LGC, the IRA is determined on the basis of the actual collections of the National Internal
Revenue Taxes (NIRTs) as certified by the Bureau of Internal Revenue (BIR).

The OSG avers that Article 284 of the LGC is consistent with the mandate of Section 6, Article
X of the 1987 Constitution to the effect that the LGUs shall have a just share in the national
taxes; that the determination of the just share is within the discretion of Congress; that the
limitation under the LGC of the basis for the just share in the NIRTs was within the powers
granted to Congress by the 1987 Constitution; that the LGUs have been receiving their just
share in the national taxes based on the correct base amount; that Congress has the authority
to exclude certain taxes from the base amount in computing the IRA; that there is a distinction
between the VATs, excise taxes and DSTs collected by the BIR, on one hand, and the VATs,
excise taxes and DSTs collected by the BOC, on the other, thereby warranting their different
treatment; and that Development Budget Coordination Committee (DBCC) Resolution No.
2003-02 dated September 4, 2003 has limited the base amount for the computation of the IRA
to the “cash collections based on the BIR data as reconciled with the Bureau of Treasury;” and
that the collection of such national taxes by the BOC should be excluded.

Issue:

Whether or not Section 284 of the LGC is unconstitutional for being repugnant to Section 6,
Article X of the 1987 Constitution

Ruling:

Yes. Section 6 of the Constitution mentions "national taxes" as the source of the just share of
the LGUs while Section 284 of the LGC ordains that the share of the LGUs be taken from
"national internal revenue taxes" instead. Congress thereby infringed the constitutional
provision.

Although the power of Congress to make laws is plenary in nature, congressional lawmaking
remains subject to the limitations stated in the 1987 Constitution.

The phrase "national internal revenue taxes" in Section 284 is undoubtedly more restrictive
than the term "national taxes" written in Section 6 of the Constitution. As such, Congress has
actually departed from the letter of the 1987 Constitution stating that national taxes should be
the base from which the just share of the LGU comes. Such departure is impermissible. Verba
legis non est recedendum (from the words of a statute there should be no departure).

Equally impermissible is that Congress has also thereby curtailed the guarantee of fiscal
autonomy in favor of the LGUs under the 1987 Constitution.
What the phrase "national internal revenue taxes" as used in Section 284 of the LGC included
are all the taxes enumerated in Section 21 of the National Internal Revenue Code (NIRC), as
amended by R.A. No. 8424, namely: income tax, estate and donor's taxes, VAT, other
percentage taxes, excise taxes, documentary stamp taxes, and such other taxes as may be
imposed and collected by the BIR.

In view of the foregoing enumeration of what are the national internal revenue taxes, Section
284 of the LGC has effectively deprived the LGUs from deriving their just share from other
national taxes, like the customs duties.

Moving forward, the BIR and the BOC are directed to certify all national tax collections. This
ruling, also known as the "Mandanas Ruling," is to be applied prospectively.

17.) Zabal v. Duterte, G.R. No. 238467, 12 February 2019

Doctrine: In recognition of their mandated roles and involvement in the rehabilitation of

Boracay, Proclamation No. 475 directed "[a]ll departments, agencies and offices, including
government-owned or controlled corporations and affected local government units x x x to
implement and execute xx x the closure [of Boracay] and the appropriate rehabilitation works,
in accordance with pertinent operational plans and directives, including the Boracay Action
Plan."
Facts:
President Duterte ordered the shutting down of Boracay Island for a maximum period of 6
months. Police and military personnel were readily deployed including personnel for crowd
dispersal management. DILG had also released guidelines for the closure.

Petitioners claim that ever since the news of Boracay's closure came about, fewer
tourists had been engaging the services of Zabal and Jacosalem such that their earnings
were barely enough to feed their families. They fear that if the closure pushes through, they
would suffer grave and irreparable damage.

They filed a petition of TRO and/or writ of preliminary injunction to restrain respondents
from enforcing a closure of Boracay Island. Should the respondents enforce the closure after
instant petition is filed, a status quo ante order be issued restoring and maintaining the
condition prior to such closure. And lastly, after proper proceedings, a permanent restraining
and/or enjoining the respondents and to declare closure of Boracay Island or the ban against
petitioners, tourists, and non-residents therefrom to be UNCONSTITUTIONAL.

Petitioners posit that Proclamation No. 475 partakes of a law imposing a restriction on
the right to travel the issuance of which is not vested in the President. As such, Proclamation
No. 475 must be struck down for being the product of an invalid exercise of legislative power.
In their Supplemental Petition, petitioners aver that Proclamation No. 475 unduly impinges
upon the local autonomy of affected Local Government Units (LGUs) since it orders the said
LGUs to implement the closure of Boracay and the ban of tourists and non-residents
therefrom. While petitioners acknowledge the President's power of supervision over LGUs,
they nevertheless point out that he does not wield the power of control over them. As such,
President Duterte can only call the attention of the LGUs concerned with regard to rules not
being followed, which is the true essence of supervision, but he cannot lay down the rules
himself as this already constitutes control.
 Respondents contend that the issuance of Proclamation No. 475 is a valid exercise of
delegated legislative power, it being anchored on Section 16 of Republic Act (RA) No. 10121,
otherwise known as the Philippine Disaster Risk Reduction and Management Act of 2010, or
the authority given to the President to declare a state of calamity. In order to effectively
discharge the enforcement and administration of the laws, the President is granted
administrative power over bureaus and offices, which includes the power of control. The
power of control, in turn, refers to the authority to direct the performance of a duty, restrain the
commission of acts, review, approve, reverse or modify acts and decisions of subordinate
officials or units, and prescribe standards, guidelines, plans and programs.

Issue: WON the proclamation intruded in the autonomy of local government units?
Ruling:
No. Contrary to petitioners' argument, RA 10121 recognizes and even puts a premium on the
role of the LG Us in disaster risk reduction and management as shown by the fact that a
number of the legislative policies set out in the subject statute recognize and aim to
strengthen the powers decentralized to LGUs.

The fact that other government agencies are involved in the rehabilitation works does
not create the inference that the powers and functions of the LGUs are being encroached
upon. The situation in Boracay can in no wise be characterized or labelled as a mere local
issue as to leave its rehabilitation to local actors. Boracay is a prime tourist destination which
caters to both local and foreign tourists. Any issue thereat has corresponding effects, direct or
otherwise, at a national level. Notice must be taken of the fact that even if the concerned
LGUs have long been fully aware of the problems afflicting Boracay, they failed to effectively
remedy it.

Yet still, in recognition of their mandated roles and involvement in the rehabilitation of
Boracay, Proclamation No. 475 directed "[a]ll departments, agencies and offices, including
government-owned or controlled corporations and affected local government units x x x to
implement and execute xx x the closure [of Boracay] and the appropriate rehabilitation works,
in accordance with pertinent operational plans and directives, including the Boracay Action
Plan."

MMDA vs. Concerned Residents of Manila Bay – called out the concerned government
agencies for their cavalier attitude towards solving environmental destruction despite hard
evidence and clear signs of climate crisis. It equated the failure to put environmental
protection on a plane of high national priority to the then lacking level of bureaucratic
efficiency and commitment.

Absent any clear showing of constitutional infirmity, arbitrariness or grave abuse of

discretion, these measures must be upheld and even lauded and promoted. After all, not
much time is left for us to remedy the present environmental situation.

Oposa vs. Factoran – State undertakes its solemn obligation to preserve the rights to a
balanced and healthful ecology and advance the health of the people, "the day would not be
too far when all else would be lost not only for the present generation, but also for those to
come - generations which stand to inherit nothing but parched earth incapable of sustaining
life.