MCQ BAR REVIEWER IN PUBLIC CORPORATIONS

GOVERNMENT CODE OF 1991) by MAURICIO C. ULEP

(LOCAL

Decentralization means the devolution of national administration to the local

governments.

Presidencia the seat of the local government unit during the Spanish
times.

One of the important operative principle of Decentralization is that there shall

be an effective allocation among the different LGUs of their respective
powers, functions, responsibilities and resources. (Alvarez vs Guingona, Jr.)

Local Government Unit- is a political subdivision of the State which is

constituted by law and possessed of substantial control over its own affairs.
Remaining to be an extra sovereign subdivision of one sovereign nation, but
not intended, however, to be an imperium in imperio (a government, power,
or sovereignty within a government, power, or sovereignty).
Local Autonomy refers to the administrative autonomy of LGUs.
The chief purpose of a municipal corporation is to regulate and administer
the local and internal affairs of a particular community.
A municipal corporation is a political division of the State. It can be best
described as an instrumentality of the State.
The value of the local government as an institution of democracy is
measured by the degree of local autonomy that they enjoy.
Society for the Prevention of Cruelty to Animals Inc. is an example of a quasi
public corporation.
The following are part of the Declaration of Policy of the LGC:
1. It is declares 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 selfreliant communities and make them more effective partners in the
attainment of national goals.
2. It is also the policy of the State to ensure the accountability of local
government units through the institution of effective mechanisms of
recall, initiative and referendum.
3. It is likewise the policy of the State to require all national agencies
and offices to conduct periodic consultations with appropriate local
government units, non-governmental and people's organizations,
and other concerned sectors of the community before any project or
program is implemented in their respective jurisdictions.

Decentralization of administration means the central government

delegates power to the LGU to broaden the base of the government power.
In the interpretation of the provisions of the LGC, the following rule shall
apply:
1. Any provision on a power of a local government unit shall be liberally
interpreted in its favor, and in case of doubt, any question thereon
shall be resolved in favor of devolution of powers and of the lower
local government unit. Any fair and reasonable doubt as to the
existence of the power shall be interpreted in favor of the local
government unit concerned;
2. In case of doubt, any tax ordinance or revenue measure shall be
construed strictly against the local government unit enacting it, and
liberally in favor of the taxpayer. Any tax exemption, incentive or
relief granted by any local government unit pursuant to the provisions
of this Code shall be construed strictly against the person claiming it.
3. The general welfare provisions in this Code shall be liberally
interpreted to give more powers to local government units in
accelerating economic development and upgrading the quality of life
for the people in the community;
4. Rights and obligations existing on the date of effectivity of this Code
and arising out of contracts or any other source of prestation
involving a local government unit shall be governed by the original
terms and conditions of said contracts or the law in force at the time
such rights were vested; and
5. In the resolution of controversies arising under this Code where no
legal provision or jurisprudence applies, resort may be had to the
customs and traditions in the place where the controversies take
place.

NOT a Declaration of Policy of the LGC.

Any provision on a power of a LGU shall be strictly interpreted against it

shall not apply in the interpretation of the provisions of the LGC.

To establish every local government unit an accountable, efficient, and

dynamic organizational structure and operating mechanism that will meet the
priority needs and service requirements of the communities.

The Philippine National Red Cross is not a public corporation because it is a

non-profit, voluntary and humanitarian organization.

Boy Scouts of the Philippines is NOT a public corporation because its

functions do not relate to the governance of any part of territory of the
Philippines.

It is not correct to say that an Act authorizing a state administrative agency to

create a municipal corporation because it is an unconstitutional delegation of
legislative power.

National Power Corporation is a public corporation because its Charter

expressly provides that it is so.

The City of Mandaue passed an ordinance abolishing 20 clerical positions

allegedly for reasons of economy and efficiency. A little more than a moth
thereafter, it created 30 new clerical positions. For this reason, the dismissed
permanent employees may sue the City for reinstatement with backwages
because the abolition of an office must not be characterized by fraud or
improper motives.

Veterans Federation of the Philippines is a public corporation because it is an

adjunct of the government.
Local water districts are classified as government owned or controlled
corporations.
In the Jones Law of 1916, otherwise known as the Philippines Autonomy
Acts, the chief exponent of autonomy was the legislature.
Cordillera Autonomous Region is NOT a public corporation because it is in
the same genre as an administrative region.
A tribal court of the Cordillera Bodong Administration may not render a valid
and executory decision because it is not a part of the Philippine judicial
system.
The principle of local self-government or autonomy is predicated on the
theory that the citizens of each municipality should determine their own local
public regulations.
The policy of ensuring the autonomy of local governments means that the
drafter of the Constitution never intended to create an imperium in imperio
and install an intra-sovereign political subdivision independent of a single
sovereign state.
Problem: The City of Muntinlupa has been giving transportation allowances
in the amount of P5,000.00 a month to judges assigned thereat. This was
duly approved by the city council. The Commission on Audit questioned this
practice and wanted to reduce it to P2,500.00 a month, for austerity reasons.
Is this valid?
Answer: No, because local autonomy prohibits the Commission on
Audit from interfering with the authority of Muntinlupa City to give
transportation benefits to judges assigned to it.
The true criterion to determine whether a corporation is public or private is to
consider the totality of the relation of the corporation to the State.
A public corporation is not covered by the constitutional ban on acquisition of
alienable public lands.
The power to establish or create LGU is not limited in scope.

Problem: The Provincial Board of Lanao abolished the position of Asst.

Provincial Assessor due to the huge deficit of funds of the province. Claiming
political prosecution, the occupant to said position, Mr. Ali Akhmad, sued the
province for reinstatement and backwages.
Answer: He is not correct because the power to create an office
includes the power to abolish it, especially if there is a huge deficit in
funds.
A plebiscite requirement is needed for the creation, abolition, division or
merger of a LGU. Its important purpose is to verify whether the indicators on
land area, income and population requirement was complied with.
Problem: A petition for annulment of the book of votes in Madalam, Lanao del
Sur was filed with the COMELEC. After ocular investigation was made by the
COMELEC, it found that indeed, there were only 2 structures in the
barangay, hence it was declared as a ghost precinct and was not allowed to
participate in the special elections and abolished it. Is this proper?
Answer: No, because it is only the Congress who has the power to
abolish municipal corporations.
Government General the person who had the duty to designate the
territory of a new town during the Spanish regime.
It was a custom observed by all towns established administratively under the
old Laws of the Indies that on their creation, a certain amount of land was
always reserved for the plaza.
The Congress cannot delegate to the ARMM Assembly the power to create
legislative districts for the House of Representatives because the power to
increase the allowable membership in Congress is vested exclusively in
Congress, pursuant to the Constitution.
The creation of the ARMM contemplate a political autonomy because it has a
basic government structure consisting of the executive, legislative, and
special courts.
Agriculture was NOT devolved in the political units covered by the ARMM.

The Regional Assembly of the ARMM may exercise legislative powers over
postal service, coinage and fiscal and monetary policies, and citizenship,
except Judicial Matters.
The President of the Philippines can merge administrative regions because
this will promote simplicity, economy and efficiency in government.
(Chiongbian vs. Orbos)
A Geodetic Engineer is in the best position and authority to issue a
Certification as to the location of properties in a boundary dispute.
The Governor General has the power of both control and supervision over
LGUs during the American period.
The power to enlarge or diminish the land area of LGUs is a political
function.
Congress may not delegate to the President the creation of LGUs because it
is lodged exclusively in Congress.
The Municipality of Andong was one of the municipalities created by virtue of
an EO but which was declared void in the Pelaez case. Nevertheless, if it
claims that it possesses the indicators to merit the status a de facto municipal
corporation after so many years, it cannot be recognized as a regular
municipality because the EO creating the municipality of Adong was annulled
and therefore it cannot exist as a municipality.
The legal creation and existence of a municipal corporation can only be
directly attacked through an action for QUO WARRANTO.

2. The ordinances and resolution of the City will be reviewed by the

Provincial Board.
3. The taxers which will be collected by the city shall be shared with the
province.
The registered voters will not be allowed to vote for their provincial officials,
is not a result of a downgrading from an independent component city to a
component city.
The advancement or downgrading in the classification of a LGU is dependent
on the census figures as determined by the National Statistics Office.
LGUs are classified from Class One to Class Six. The classification is the
grouping together of communities for the purposes of legislation, which by
reason of similarity or situation, will have their public interests best served by
similar regulations.
For a province to be classified into classes, it must meet the annual income
provided under the EO 249 dated July 25, 1987:
First Class P30 Million
Second Class P20-30 Million
Third Class P15-20 Million
Fourth Class P10-15 Million
Fifth Class P5-10 Million
Sixth Class Less than P5 Million
The following are the purpose in the income classification:

For a highly urbanized city to be created, it must have an annual income of at

least P100,000,000.00.

1. The formulation and execution of local government budget policies.

A barangay may be created through an ordinance provided it is located within

its territorial jurisdiction and subject to such limitations and requirements in
the LGC.

2. The fixing of maximum tax ceiling imposable by the local

governments.

The creation of the autonomous region is made to depend on the majority

vote of the constituent units or units affected.
A plebiscite was held in CAR. However, only one province of Ifugao voted in
for and the rest of the member provinces refused it. For this reason, the
CARs operation is suspended.

3. The implementation of personnel policies on promotions, transfers

and related matters at the local government level.
Except: The determination of the number of elective local officials.
The following is an essential requirement for a valid classification:

The following are results of a downgrading from an independent component

city to a component city:

1. It need not be scientific, logical or consistent if it is reasonably

adapted to secure the purpose intended.

1. The independence of the city as a political unit will be diminished.

2. It must be on real distinctions that make the class substantially

different from other classes.

3. The classification must have a reasonable bases and not arbitrary.

Except: The validity of classification is to be ascertained by the
number of municipal corporations affected by law.
A statute provides that in first and second class municipalities, employees
could retain their prior service credit benefits upon transfer to other municipal
employment, while employees in municipalities of third and fourth classes
would be excluded from participating in such benefits. Is it valid?
-No, since the distinction serves no public purpose.
The following illustrates a valid classification of a municipality based on
population:
1. Stature relating to the existence of an airport.
2. Statute creating a park district.
3. Extension of municipal boundaries.
Invalid: Statute for fixing pensions.
The following illustrates an invalid classification of a municipality based on
population:

NOT NEEDED: The adoption of the higher slary schedule shall not
be subject to the budgetary limitations on personal services
expenditures.
The authority of a municipality to issue zoning classification is an exercise of
its POLICE POWER.
The official zoning map is an indispensable part of a zoning ordinance
because it is an integral part of the ordinance, otherwise, it will be VOID.
Pipo bought a parcel of land from Wise Corporation, a leading realty firm.
One of the restrictions in the deed of sale is that the lot shall be used by the
buyer exclusively for residential purposes. A main highway having been
constructed across the subdivision, the area became commercial in nature.
Subsequently declaring the lot as a commercial area. Wise Corporation went
to court to stop the construction as violative of the building restrictions
imposed by it. It argues that the zoning ordinance cannot nullify the
contractual obligation assumed by the buyer.
-The contention of Wise Corporation is incorrect because the
enactment of the zoning ordinance is a valid exercise of police power.
(#70-71 page 28-29 skipped)

Under RA 6636, allotment of elective members to provinces and

municipalities must be made on the basis of a classification. There must be
10 elective members for the first and second class provinces, 8 elective
members for the third and fourth class provinces, and 6 elective members for
the fifth and sixth class provinces.

The following is the effect of a conversion from a sub province to a province:

1. The new legislative districts shall continue to be represented in the
Congress by the duly elected representative of the original districts
until their own representatives shall have been elected and qualified.
2. The appointees shall hold office until their successors shall have
been elected in the regular local elections following the plebiscite
and have qualified.
3. All qualified appointive officials and employees in the career service
of the sub-provinces at the time of their conversion into regular
province shall continue in office in accordance with civil service law,
rules and regulations.

The following is needed to adopt a salary scheme for special cities and first
class provinces:

The law or ordinance creating the LGU shall specify the seat of government
of the LGU.

1. The LGU is financially capable.

2. The adoption of a higher salary schedule shall not alter the existing
classification of the LGU concerned.
3. The salary grade allocation of positions of personnel shall be
returned.

The vote needed to change or not to change the seat of the government of
the LGU is its Sanggunian may, after public hearing and by a vote of 2/3 of
all its members.

1. Stature for treatment of indigent inebriates at public expense.

2. Statute for lease of municipal wharves.
3. Statute for a civil service systems for municipal employees.
Valid: Statute for tax bills for special improvements.

A local government unit, public place, street or structure may change its
name not oftener than once every 10 years.

The Municipality of Tanza wants to change its name to the Municipality of

Sunshine. The change of name will become effective only upon ratification in
a plebiscite conducted for the purpose in the political unit directly affected.
The corporate existence of a LGU shall commence upon the election and
qualification of its chief executive and a majority of the members of its
Sanggunian, unless it is fixed by the law or ordinance creating it.
The power of municipal corporations must be construed strictly against the
municipality.
The implied powers of LGU must be construed LIBERALLY.
A municipality may bring an action against the State challenging the
constitutionality of a statute on behalf of its residents as an exception, where
the municipality will be affected if it fails to do so.
Police Power is chiefly based on SALUS POPULI SUPREMA EST LEX.
The test of constitutionality
REASONABLENESS.

of

police

power

measure

is

Police power, unlike the power of eminent domain, is exercised without

provisions for just compensation.
-It depends. If a property is seized in the interest of heath and
security, the owner is not entitled to compensation, unless he can show that
the seizure is unjustified.

The following ordinance is an exercise of police power:

1. Penalizing vagrancy.
2. Prohibiting the sale of pork carcass at the sidewalks instead of inside
the market.
3. Regulating the issuance of licenses to gasoline stations at
reasonable distances, say 200 meters away.
(#85-86 page 34-35 skipped)
A contract cannot override the exercise of police power because the interest
of public welfare and greater good must be paramount.
(#88-108 skipped)