A privately held company or close corporation is a

business company owned either by non-governmental organizations or by a

relatively small number of shareholders or company members which does
not offer or trade its company stock (shares) to the general public on
the stock market exchanges, but rather the company's stock is offered,
owned and traded or exchanged privately. More ambiguous terms for a
privately held company are unquoted company and unlisted company.
A Government-owned and controlled corporation (GOCC), sometimes
with an "and/or",[1] is a term in the Philippines used to describe governmentowned corporations that conduct both commercial and non-commercial
activity. Examples of the latter would be the Government Service Insurance
System, a social security system for government employees. There are over
200 GOCCs.[2] GOCCs both receive subsidies and pay dividends to the
national government.
Under the GOCC Governance Act (Republic Act 10149; Government Owned
and Controlled Corporations (GOCC) Governance Act of 2011), GOCCs are
overseen by theGovernance Commission for Government-Owned and
-Controlled Corporation (GOC).[3] The Governance Commission is the
"governments central advisory and oversight body over the public corporate
sector" according to the Official Gazette of the Philippine government. [4] The
Governance Commission among other duties prepares for the President of
the Philippines a shortlist of candidates for appointment by the president to
GOCC boards.[3]
Many but not all GOCCs have their own charter or law outlining its
responsibilities and governance.[5]
ART. 10, 1987 CONSTITUTION: LOCAL GOVERNMENT
GENERAL PROVISIONS
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 2. The territorial and political subdivisions shall enjoy local autonomy.

Section 3. The Congress shall enact a local government code which shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization with effective mechanisms of
recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide
for the qualifications, election, appointment and removal, term, salaries,
powers and functions and duties of local officials, and all other matters
relating to the organization and operation of the local units.
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.
Section 5. Each local government unit shall have the power to create its own
sources of revenues and to levy taxes, fees and charges subject to such
guidelines and limitations as the Congress may provide, consistent with the
basic policy of local autonomy. Such taxes, fees, and charges shall accrue
exclusively to the local governments.
Section 6. Local government units shall have a just share, as determined by
law, in the national taxes which shall be automatically released to them.
Section 7. Local governments shall be entitled to an equitable share in the
proceeds of the utilization and development of the national wealth within
their respective areas, in the manner provided by law, including sharing the
same with the inhabitants by way of direct benefits.
Section 8. The term of office of elective local officials, except barangay
officials, which shall be determined by law, shall be three years and no such
official shall serve for more than three consecutive terms. Voluntary
renunciation of the office for any length of time shall not be considered as an
interruption in the continuity of his service for the full term for which he was
elected.
Section 9. Legislative bodies of local governments shall have sectoral
representation as may be prescribed by law.
Section 10. No province, city, municipality, or barangay may be created,
divided, merged, abolished, or its boundary substantially altered, except in
accordance with the criteria established in the local government code and
subject to approval by a majority of the votes cast in a plebiscite in the
political units directly affected.

Section 11. The Congress may, by law, create special metropolitan political
subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The
component cities and municipalities shall retain their basic autonomy and
shall be entitled to their own local executive and legislative assemblies. The
jurisdiction of the metropolitan authority that will thereby be created shall be
limited to basic services requiring coordination.
Section 12. Cities that are highly urbanized, as determined by law, and
component cities whose charters prohibit their voters from voting for
provincial elective officials, shall be independent of the province. The voters
of component cities within a province, whose charters contain no such
prohibition, shall not be deprived of their right to vote for elective provincial
officials.
Section 13. Local government units may group themselves, consolidate or
coordinate their efforts, services, and resources for purposes commonly
beneficial to them in accordance with law.
Section 14. The President shall provide for regional development councils or
other similar bodies composed of local government officials, regional heads
of departments and other government offices, and representatives from nongovernmental organizations within the regions for purposes of administrative
decentralization to strengthen the autonomy of the units therein and to
accelerate the economic and social growth and development of the units in
the region.
AUTONOMOUS REGIONS
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.
Section 16. The President shall exercise general supervision
autonomous regions to ensure that laws are faithfully executed.

over

Section 17. All powers, functions, and responsibilities not granted by this
Constitution or by law to the autonomous regions shall be vested in the
National Government.
Section 18. The Congress shall enact an organic act for each autonomous
region with the assistance and participation of the regional consultative
commission composed of representatives appointed by the President from a
list of nominees from multisectoral bodies. The organic act shall define the

basic structure of government for the region consisting of the executive

department and legislative assembly, both of which shall be elective and
representative of the constituent political units. The organic acts shall
likewise provide for special courts with personal, family, and property law
jurisdiction consistent with the provisions of this Constitution and national
laws.
The creation of the autonomous region shall be effective when approved by
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.
Section 19. The first Congress elected under this Constitution shall, within
eighteen months from the time of organization of both Houses, pass the
organic acts for the autonomous regions in Muslim Mindanao and the
Cordilleras.
Section 20. 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.
Section 21. The preservation of peace and order within the regions shall be
the responsibility of the local police agencies which shall be organized,
maintained, supervised, and utilized in accordance with applicable laws. The
defense and security of the regions shall be the responsibility of the National
Government.

Administrative decentralization seeks to redistribute authority,

responsibility and financial resources for providing public services among
different levels of government. It is the transfer of responsibility for the
planning, financing and management of certain public functions from the
central government and its agencies to field units of government agencies,
subordinate units or levels of government, semi-autonomous public
authorities or corporations, or area-wide, regional or functional authorities.
The three major forms of administrative decentralization -- deconcentration,
delegation, and devolution -- each have different characteristics.
Deconcentration. Deconcentration --which is often considered to be the
weakest form of decentralization and is used most frequently in unitary
states-- redistributes decision making authority and financial and
management responsibilities among different levels of the central
government. It can merely shift responsibilities from central government
officials in the capital city to those working in regions, provinces or districts,
or it can create strong field administration or local administrative capacity
under the supervision of central government ministries.
Delegation. Delegation is a more extensive form of decentralization.
Through delegation central governments transfer responsibility for decisionmaking and administration of public functions to semi-autonomous
organizations not wholly controlled by the central government, but ultimately
accountable to it. Governments delegate responsibilities when they create
public enterprises or corporations, housing authorities, transportation
authorities, special service districts, semi-autonomous school districts,
regional development corporations, or special project implementation units.
Usually these organizations have a great deal of discretion in decisionmaking. They may be exempt from constraints on regular civil service
personnel and may be able to charge users directly for services.
Devolution. A third type of administrative decentralization is devolution.
When governments devolve functions, they transfer authority for decisionmaking, finance, and management to quasi-autonomous units of local
government with corporate status. Devolution usually transfers
responsibilities for services to municipalities that elect their own mayors and
councils, raise their own revenues, and have independent authority to make
investment decisions. In a devolved system, local governments have clear

and legally recognized geographical boundaries over which they exercise

authority and within which they perform public functions. It is this type of
administrative decentralization that underlies most political decentralization.
HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA,
and HON.CALIXTO CATAQUIZ,
petitioners, vs
. HON. FRANCISCO DIZON PAO and TONYCALVENTO,
respondents
.
G.R. No. 129093
FACTS:On December 29, 1995, respondent Tony Calvento was appointed
agent by the Philippine Charity Sweepstakes Office (PCSO) to install Terminal
OM 20 for the operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of
San Pedro, Laguna, for a mayors permit to open the lotto outlet. This was
denied by Mayor Cataquiz in a letter dated February 19, 1996. The ground
for said denial was an ordinance passed by the Sangguniang Panlalawigan of
Laguna entitled Kapasiyahan Blg. 508, T. 1995which was issued on
September 18, 1995.As a result of this resolution of denial, respondent
Calvento filed a complaint for declaratory relief with prayer for preliminary
injunction and temporary restraining order. In the said complaint,
respondent Calvento asked the Regional Trial Court of San Pedro Laguna,
Branch 93, for the following reliefs: (1) a preliminary injunction or temporary
restraining order, ordering the defendants to refrain from implementing or
enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon.
Municipal Mayor Calixto R. Cataquiz to issue a business permit for the
operation of a lotto outlet; and (3) an order annulling or declaring as invalid
Kapasiyahan Blg. 508, T. 1995.On February 10, 1997, the respondent judge,
Francisco Dizon Pao, promulgated his decision enjoining the petitioners
from implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995.
ISSUE: WON Kapasiyahan Blg. 508, T. 1995 is valid
HELD: As a policy statement expressing the local governments objection to
the lotto, such resolution is valid. This is part of the local governments
autonomy to air its views which may be contrary to that of the national
governments. 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.n 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 is obvious, as elucidated in Magtajas v.

Pryce Properties Corp

DADOLE VS COA
G.R. No. 125350 December 3 2002
FACTS:
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.
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 members of the Cabinet and other executive officials are merely alter
egos of the President. As such, they are subject to the power of control of the
President; he will see to it that the local governments or their officials were
performing their duties as provided by the Constitution and by statutes, at
whose will and behest they can be removed from office; or their actions and
decisions changed, suspended or reversed. They are subject to the
President's supervision only, not control, so long as their acts are exercised
within the sphere of their legitimate powers. The President can only interfere
in the affairs and activities of a LGU if he or she finds that the latter has
acted contrary to law. This is the scope of the President's supervisory powers
over LGUs
LOCAL AUTONOMY

Local autonomy is the exercise of certain basic powers, i.e. police power,
power of eminent domain, and taxing power, by local government units so as
to best serve the interest and promote the general well being of their
inhabitants.
By express constitutional mandate, enjoyment of local autonomy by the
territorial and political subdivisions, i.e. all government units including the
two autonomous regions (actually just one: ARMM), is now a basic state
policy.
RA 7160: 1991 Local Government Code
Sec. 15. As a body politic and corporate, every LGU shall exercise its powers
as a political subdivision of the government and as a corporate entity
representing the inhabitants of its territory.
The Local Government Code shall
1.

Provide for a more responsible and accountable local government

structure instituted through a system of decentralization with effective
mechanisms of recall, initiative and referendum.

2.

Allocate among the different local units their powers, responsibilities

and resources

3.

Provide for the qualifications, election, appointment and removal, term,

salaries, powers, and functions, and duties of local officials

4.

Provide for all other matters relating to the organization and operation
of the local units.
UPDATE: There are supposedly two autonomous regions as per our
Constitution ARMM and CAR. But CAR did not have a successful plebiscite for
the said purpose hence it remains as an administrative region, i.e.,
Cordillera Administrative Region. ARMM on the other hand has been replaced
by the Bangsamoro pursuant to the 2012 Framework Agreement on the
Bangsamoro between the Philippine Government and the Moro Islamic
Liberation Front (MILF). The Bangsamoro is still an autonomous region.
FISCAL AUTONOMY

The controversy between the Supreme Court and the Department of

Budget and Management over the unused appropriations for the
judiciary is about fiscal autonomy. Fiscal autonomy is a guarantee
given by the Constitution to certain units of the government. It is
intended as a guarantee of separation of powers and of
independence from political agencies. The units that have been
given fiscal autonomy are the constitutional commissions, the
ombudsman and the judiciary. The language used in the grant of the
guarantee is almost identical for all three units. The Supreme Court
jealously guards fiscal autonomy.
The guarantee for the Constitutional Commissions says, The
Commission shall enjoy fiscal autonomy. Their approved annual
appropriations shall be automatically and regularly released. For
the Ombudsman it says, The Office of the Ombudsman shall enjoy
fiscal autonomy. Its approved annual appropriations shall be
automatically and regularly released. The provision for the
judiciary has an addition not found in the other two: The Judiciary
shall enjoy fiscal autonomy. Appropriations for the Judiciary may not
be reduced by the legislature below the amount appropriated for the
previous year and, after approval, shall be automatically and
regularly released.
There is a similar provision for local governments although the
phrase fiscal autonomy is not used. It says: Local government units
shall have a just share, as determined by law, in the national taxes
which shall be automatically released to them. The Supreme Court
has had the opportunity to explain the meaning of the phrase
automatically and regularly released. When President Ramos
issued an executive order saying that 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, this was challenged as an unconstitutional restriction on
local autonomy.
The Supreme Court ruled: 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.

The phrase automatically and regularly released was also a

subject of contention between the Civil Service Commission (CSC)
and the budget secretary. The controversy involved the no report,
no release policy imposed by the DBM on funds appropriated for
the CSC.
In resolving the issue the Court harked back to an earlier decision on
the meaning of automatic release for local government units
relying on the dictionary meaning of automatic. Websters Third
New International Dictionary defines automatic as involuntary
either wholly or to a major extent so that any activity of the will is
largely negligible; of a reflex nature; without volition; mechanical;
like or suggestive of an automaton. Further, the word
automatically is defined as in an automatic manner: without
thought or conscious intention. Being automatic, thus, connotes
something mechanical, spontaneous and perfunctory. As such the
LGUs are not required to perform any act to receive the just share
accruing to them from the national coffers. x x x
The Court concluded: By parity of construction, automatic release
of approved annual appropriations to petitioner, a constitutional
commission which is vested with fiscal autonomy, should thus be
construed to mean that no condition to fund releases to it may be
imposed.
The DBM tried to wiggle out of its predicament claiming that the no
report, no release was due to a shortfall in revenues. The Court
said that such shortfall does not justify non-compliance with the
Constitution and that [a]n interpretation should, if possible, be
avoided under which a statute or provision being construed is
defeated, or as otherwise expressed, nullified, destroyed,
emasculated, repealed, explained away, or rendered insignificant,
meaningless, inoperative, or nugatory.
Having said all that, one might ask how the current controversy on
unspent funds of the judiciary will be resolved. I anticipate that the
resolution will be along the lines of a 1993 Supreme Court resolution
on the judiciarys fiscal autonomy. The resolution says: The
Supreme Court may submit to the Department of Budget and
Management reports of operation and income, current plantilla of
personnel, work and financial plans and similar reports only for

recording purposes. The submission thereof concerning funds

previously released shall not be a condition precedent for
subsequent fund releases.
Related to all this, of course, is the issue of impoundment, that is,
the holding of unspent appropriated funds. It is something done by
presidents as a form of executive veto. It was first used by
Thomas Jefferson. There is no provision in the Constitution on the
subject. The concept has come up in local jurisprudence, but the
Supreme Court has heretofore refrained from passing judgment on
its constitutionality.
Finally, like it or not, the Constitution means what the Supreme
Court says it means, until the Supreme Court changes its mind. We
know who will referee the controversy between the Supreme Court
and the DBM.