Pimentel v Aguirre The Executive cannot force LGUs to reduce their expenditures by 25%, nor can it withhold some

of their internal revenue allotments Date of Promulgation: July 19, 2000 Ponente: Panganiban Nature of the Case: special civil action in C for certiorari an! prohibition "acts #$uilino Pimentel Jr% petitions to annul an! prohibit the implementation of certain provisions of #!ministrative &r!er '(2 )#!option of *conomy +easures in ,overnment for "- 199./, issue! on December 2(, 199( #nnul: ec 1, #& '(2 for requiring 0,1s to re!uce their e2pen!itures by 234 of their authori5e! regular appropriations for non6personal services Prohibit implementation: ec 7, #& '(2 8ithhol!ing 104 of 0,1s9 internal revenue allotment :ssue: ;hether or not the presi!ent committe! grave abuse of !iscretion in a/ &r!ering 0,1s to re!uce their costs by 234 is this a violation of 0,1s9 fiscal autonomy< b/ &r!ering the 8ithhol!ing of 104 of the 0,1s9 :=# =uling: Petition grante!% #& '(2 cannot be implemente!% a/ Cost re!uction cannot be ma!e man!atory, violates fiscal autonomy% b/ 0ocal fiscal autonomy re$uires the automatic release of 0,1 shares in the national internal revenue =easoning a/ 0,1s have fiscal autonomy they have the po8er to create their o8n sources of revenue an! allocate their resources asi!e from 8hat the central govt prescribes a% =e$uisites before Presi!ent may interfere in local fiscal matters i% 1nmanage! public sector !eficit of the nat9l gov9t ii% Consultations 8ith enate>?&= an! presi!ents of various local leagues iii% =ecommen!ation of the secretaries of finance, interior an! local gov9t an! bu!get an! management b% ec 1 is merely #D@: &=- in character recogni5e nee! for fiscal restraint in a perio! of economic !ifficulty c% :f the 234 re!uction is not follo8e!, no legal sanction may be impose! upon those 0,1s b/ =elease of the shares of 0,1s in the N:= Ashall not be subBect to any lien or hol!bacC that may be impose! by the national government for 8hatever purposeD #rt E ec F, 19.( Constitution a% ?#00 is a 8or! of comman!, therefore it is C&+P10 &=- not to 8ithhol! Notes Scope of the Presidents power of supervision over LGUs o #rt E ec 7, 19.( Constitution: AGhe Presi!ent of the Philippines shall e2ercise general supervision over local governmentsD the presi!ent can only 1P*=@: * 0,1s, not C&NG=&0 them% Hut 8hat9s the !ifference< upervision: overseeing or the po8er of authority of an officer to see that subor!inate officers perform their !uties AGhe po8er of mere oversight over an inferior bo!yI it !oes not inclu!e any restraining authority over such bo!yD

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Control: po8er of an officer to alter>mo!ify>nullify>set asi!e 8hat a subor!inate officer has !one in the performance of his !uties an! to substitute the Bu!gment of the former for that of the latter o Ghe Presi!ent has control over Cabinet members an! other e2ecutive officials, because they are his alter6egos o Ghe Presi!ent has supervision over hea!s of political sub!ivisions )liCe 0,1s/, because Atheir sovereign po8ers emanate from the electorate, to 8hom they are !irectly accountableD Extent of Local Autonomy o 0ocal autonomy: a more responsive an! accountable local government structure institute! through !ecentrali5ation o Decentrali5ation: !evolution of national a!ministration, N&G P&;*=, to local governments : A8hen the central government !elegates a!ministrative po8ers to political sub!ivisions in or!er to broa!en the base of government po8er an! in the process to maCe local governments more responsive an! accountableD o &nly a!ministrative po8ers over local affairs are !elegate! to political sub!ivisions =efutation of Japunan9s Dissent )because ma9am might asC about this &K&/ o Petition is premature o Not raise! by parties, !ue process prevents the use of this groun! to parties 8ho have not been given sufficient notice of its presentation Hesi!es, real issue is 8hether ection 7 is constitutional #&'(2 falls 8ithin Presi!ent9s po8ers as chief fiscal officer ec 7 has no legal or constitutional basis% *2amples Japunan cite! ha! bases% :=# 8ithhol!ing implie! in Presi!ent9s authority to a!Bust in case of an unmanageable public sector !eficit :n striCing !o8n ec 7, the Court is not ruling out any form of re!uction in the :=#s of 0,1s No interaction or consultation 8as hel! 8ith the 0,1s regar!ing the re!uction% *ven the respon!ents !o not refute this% ec 2.( !oes not give the Presi!ent implie! authority to 8ithhol! 0,1 :=#

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